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Federal Direct Loan Program

These are government loans for eligible students to help cover the cost of higher education. Eligible students borrow directly from the U.S. Department of Education.

There are two types of Federal Direct Loans:

  • Subsidized: based on financial need and the federal government pays interest during the student’s enrollment in school.
  • Unsubsidized: not based on financial need and the student is responsible for interest payments.

Unsubsidized Direct Loans require that the student pay the interest that accrues while attending school. If a student chooses to defer the interest until after graduation, the interest will be capitalized, resulting in a larger principal balance and more interest paid.

For current interest rates on Federal Student loans, please visit the loan page of the Federal Student Aid website.

Students may qualify for either of the above types of Direct Loans or a combination of the two. To be potentially eligible for the Federal Direct Loans, students must be enrolled for a minimum of six credits per semester.

Students must also complete the following three steps:

  1. Complete the FAFSA online.
    HCC School Code: 002074.
  2. Complete the Entrance Counseling online here.
  3. Accept/Decline/Adjust loans online.
    Students should accept/decline/adjust their loan(s) online as soon as possible after receiving notification from the SFAO. All actions can be completed online via Self-Service. Students should see “review and accept your financial aid award package” under their checklist.

Awarding for the Federal Direct Loans will be as follows:

  • Freshman students will be awarded $5500 ($3500 subsidized/$2000 unsubsidized). 
  • Sophomore students, who have completed at least 30 credit hours, will be awarded $6500 ($4500 subsidized/$2000 unsubsidized).
  • An independent student or a dependent student whose parent has been denied a parent loan and requires additional UNSUBSIDIZED LOAN FUNDS to pay for college expenses can request an additional $4,000 unsubsidized loan using the additional unsubsidized loan request form.

Loans are usually distributed evenly between the fall and spring semesters.

All loans are disbursed in two disbursements. Half of the certified loan amount is disbursed during the fall semester and the second half is disbursed during the spring semester. If a student is awarded a loan for fall only or spring only, there will be two disbursements per semester.

Aggregate Loan Limits

Maximum limit while working on all undergraduate degrees:

  • Dependent students are limited to $31,000 (no more than $23,000 of which can be subsidized)
  • Independent students are limited to $57,500 (no more than $23,000 can be subsidized)

Parent Loan for Undergraduate Students (PLUS)

This loan is for parents of dependent undergraduate students. Parent borrowers generally must begin repaying principal and interest within 60 days after the loan is completely disbursed. They may apply for deferment of payment with their lender(s).

Students and parents wishing to apply for education loans must meet all requirements for federal financial aid, complete the FAFSA, and complete a PLUS borrower information sheet, available online at

Federal Student Loan Consolidation

  • If you have borrowed Federal Student Loans in the past and are nearing the end of your student career, you may wish to consolidate your federal student loans in order to reduce the number and amount of student loan payments that you must make per month.
  • For more information on this option, visit: Federal Student Aid: Consolidation Loans.