Federal Direct Loans

DBU participates exclusively in the William D. Ford Federal Direct Loan program, which is the U.S. Department of Education’s federal student loan program. The loans issued by this program are from the U.S. Department of Education rather than from a traditional bank. You must submit a FAFSA each year to qualify for federal student loans. Learn more about FAFSA >>

To be eligible for student loans, you must be:

• A U.S. citizen, national, permanent resident, or other eligible noncitizen
• Enrolled at least half-time
• In good financial standing, not in default owing a refund to any previous aid program
• In good academic standing, maintaining satisfactory academic progress

Learn about the Difference Between a Subsidized and an Unsubsidized Loan >>

Federal Direct Loan Types

Federal Direct Subsidized Loans (Undergraduate)

Direct Subsidized loans are awarded to all eligible undergraduate students who demonstrate financial need, as determined by the FAFSA. No interest accrues while a student is enrolled at least half-time during the grace or deferment periods. Undergraduate students can borrow up to $5,500 in direct subsidized loans per year depending on year in school and dependency status.

First-time borrowers will be required to complete a Master Promissory Note and Entrance Counseling before loan funds can be disbursed.

Federal Direct Unsubsidized Loans (Undergraduate and Graduate)

Unsubsidized loans are non-need-based loans and are available regardless of financial need. Students must be enrolled in a degree program with six or more Title IV credits to be eligible.

First-time borrowers will be required to complete a Master Promissory Note and Entrance Counseling before loan funds can be disbursed.

The federal government does NOT pay the interest. Interest begins to accrue as soon as the loan funds are disbursed. Students may choose to pay the interest that accumulates or have it capitalized, meaning the interest will be added to the principal amount of their loan. Additional interest will be based upon the higher amount. Paying the interest as it accumulates will reduce the amount of interest that must be repaid.

Direct PLUS Loan

Under previous regulations, PLUS Loans were available to help parents of dependent undergraduate students and graduate/professional students pay for education expenses up to the cost of attendance minus all other financial assistance.

Significant changes to federal loans were signed into law that will affect students beginning enrollment on July 1, 2026. The information below reflects the most current guidance available and is subject to change as we receive official guidance from the Department of Education.

Parents of Undergraduate Students

 As of July 1, 2026, first-time Parent PLUS Loan borrowers have new annual and aggregate (lifetime) loan limits:

• The new annual limit is $20,000 per year per dependent student.
•  The new aggregate (lifetime) loan limit is $65,000 per dependent student.
• These new limits apply to all parents combined per dependent student.

Legacy Provision (Parent PLUS borrowers and Graduate PLUS borrowers)

An exception called the “legacy provision” exists to allow Parent PLUS borrowers to borrow under the previous limits.

Qualifications for this exception are as follows:

• Student is enrolled as of June 30, 2026,
• Student or their parent(s) previously borrowed a federal loan for their program of study, and
• Student stays enrolled in the same program of study through the program’s expected length or graduation, whichever occurs first.

This allows eligible borrowers to borrow up to the full Cost of Attendance (COA) minus any other financial aid, with no lifetime aggregate cap. However, after these conditions expire or if enrollment lapses, parents become subject to the new statutory caps, which limit Parent PLUS loans to $20,000 per year and a $65,000 lifetime limit per student.

Graduate and Professional Students

As of July 1, 2026, the Graduate PLUS Loan program for graduate and professional students will be eliminated for all new borrowers. Students who begin their graduate program on or after July 1, 2026, will no longer be offered Grad PLUS Loans.

The above legacy provision exists to allow students to still borrow the Graduate PLUS Loan. This provision temporarily protects prior borrowing rules for continuing students. Qualifications for this exception are as follows:

• Student is enrolled as of June 30, 2026,
• Student previously borrowed a federal loan for their program of study, and
• Student stays enrolled in the same program of study through the program’s expected length or graduation, whichever occurs first.

Beginning July 1, 2026, students enrolled in DBU graduate degree programs may borrow up to $20,500 annually in Federal Direct Unsubsidized Loans, subject to federal eligibility requirements.

The aggregate Federal Direct Loan limit for graduate students is $100,000 for graduate study.

• Apply for a Direct PLUS Loan for parents
• Apply for a Direct PLUS Loan for graduate or professional students

Direct Loan Information

Direct Loan Limits

Undergraduate student loan limits range from $5,500 to $12,500 per year depending on certain factors, including the student's year in college and other aid received. To receive a Direct Loan, you must be enrolled at least half-time in at least one Long Semester class within each award period/term in back-to-back classes whose duration is the same length.

Part-Time Enrollment and Loan Eligibility

Beginning with the 2026-2027 academic year, Federal Direct Loans are required to be reduced for students enrolled less than full-time.

To be considered full-time, students must be enrolled in at least the following number of credit hours, depending on their classification:

• Undergraduate = 12 or more credit hours
• Graduate = 9 or more credit hours
• Doctoral = 6 or more credit hours

A student that is enrolled in less than full-time status based on their classification, but maintains at least half-time enrollment, will have their federal loans prorated. Loans that will be affected are Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Graduate PLUS Loans. Direct Parent PLUS Loans are exempt from this proration.

Part-Time Loan Proration Rules

Under OB3, federal loan proration shifts the amount you can borrow away from a flat rate to a percentage:

• Formula: Loan Eligibility = (Actual Credit Hours ÷ Full-Time Credit Hours) × 100.
• Undergraduate Full-Time: Typically defined as 12 credits per semester.
• Example: If you are a dependent freshman with a maximum loan limit of $2,750 per semester as a full-time student, but you enroll part-time at 6 credits (50% intensity), your maximum loan drops to $1,375 for that term.

Key Eligibility Factors to Note

• Half-Time Minimum: Students taking fewer than 6 credit hours are classified as less-than-half-time and are ineligible to receive federal student loans.

Loan Limits & Repayment

The amount borrowed in a Subsidized, Unsubsidized, Parent PLUS, or Grad PLUS loan will enter repayment status when a student is no longer enrolled by either graduating, withdrawing, or if enrollment falls below half-time. We strongly urge student borrowers to contact their loan servicer to establish repayment options. Students can learn more about repayment responsibilities here.

We strongly advise students to review the Annual Loan Limits chart to determine the maximum loans available to borrow. The amount of other financial aid may limit or even reduce the number of loans a student may receive. Students should contact the Office of Financial Aid to have a counselor perform a file review. The Office of Financial Aid will consider students for the maximum amount of subsidized loans for which they are eligible.

If a student uses their total annual loan amounts for the Fall or Spring (or both), no loan availability will remain for the summer. We strongly urge each student borrower to plan accordingly and borrow wisely. If you have any questions, please contact the Office of Financial Aid. Total federal loan amount borrowed can be viewed on the Federal Student Aid website.

Repayment changes for future borrowers

• Students who borrow a new Federal Direct loan on or after July 1, 2026, may have different repayment plans than earlier borrowers.
• Based on current guidance, new borrowers may be limited to the following repayment options:
  
  • Tiered Standard Repayment Plan: Fixed monthly payments over a term of 10 to 25 years
  • Repayment Assistance Plan: Income-based repayment plan offering loan forgiveness after 30 years of payments and qualifies for Public Service Loan Forgiveness 

Entrance and Exit Counseling

Students awarded and wishing to utilize Federal Direct Loans to pay against educational expenses must visit StudentAid.gov to secure their Federal Loans.

As part of that process, students are required to complete online entrance counseling and sign an electronic Master Promissory Note (MPN) before the loan application process can be completed. This is a federal requirement before loan funds can be disbursed to any student account. 

Federal regulations require all student federal loan borrowers to complete exit counseling and to provide updated information at the time a borrower graduates, withdraws, or if enrollment falls below half-time.

It is important that students contact the financial aid office anytime they plan to reduce enrollment to below half-time status or when they plan to withdraw from the university.

Student Loan Repayment Obligation

Student loans are a legal and binding financial obligation. Repayment is not optional. The following points are listed in order of importance to emphasize the seriousness of repayment responsibilities and the consequences of default.

1. Repayment Is Mandatory

A student loan is a serious financial commitment that you are required to repay, including any interest and fees, according to the terms you agreed to when you accepted the loan. Repayment is required even if you do not complete your program, are unable to find a job, or are dissatisfied with your education. Most loans offer a grace period after you leave school before payments begin, but once repayment starts, you must make your payments on time each month.

2. Failure to Pay Has Serious Consequences

Failing to repay a student loan can lead to serious financial and legal consequences. Initially, missed payments may result in late fees and additional interest. Continued nonpayment can damage your credit score, which may affect your ability to obtain credit cards, car loans, housing, or even employment. If the loan becomes delinquent and then goes into default, the loan holder may send the account to collections, add collection costs, garnish your wages without a court order (for federal loans), withhold federal or state tax refunds, and offset certain government benefits. You may also lose eligibility for additional federal student aid and flexible repayment options. In severe cases, legal action may be taken to recover the debt.

3. Prepare for Repayment

Students can prepare for student loan repayment by planning early and staying informed about their responsibilities. Repayment is required according to the terms and conditions of your promissory note(s). You must start repayment after the grace period ends.
For most federal student loans, the grace period ends six months after you graduate, leave school, or drop below half-time enrollment. This six-month period gives you time to prepare for repayment before your first payment is due. Not all loans have the same grace period. PLUS Loans for parents and graduate students generally do not have a standard grace period (though a short deferment may be available). Private student loans vary by lender, so the length of the grace period depends on the terms of your specific loan. It is important to confirm your exact repayment start date with your loan servicer to avoid missed payments and potential penalties.

Before leaving school, review how much you have borrowed and understand your loan terms, including interest rates, grace periods, and monthly payment estimates (Loan Simulator). Create a realistic budget that includes your anticipated loan payment along with living expenses. Stay in contact with your loan servicer and ensure your contact information is current so you receive important updates. Explore repayment plan options to help you determine which one is right for you and your situation. Most importantly, begin repayment with a clear understanding that your student loan is a long-term financial obligation that requires consistent, on-time payments.

4. Where Can You Find Information About Your Student Loans?

An important part of managing your finances is staying informed about your total student loan debt and repayment status. The best place to find your federal student loan information is StudentAid.gov, the U.S. Department of Education’s official website for federal student aid records.

At StudentAid.gov, you can view:

• Your total loan amounts and current balances
• Your loan servicer(s) and their contact information
• Your interest rates
• Your current loan status (such as in repayment, deferment, or default)
• Your repayment history and overall progress

Regularly reviewing your loan information helps you stay organized, plan ahead, and avoid missed payments.

5. Resolve any disputes with your lender/ loan servicer.

• If you are unable to resolve a dispute with your lender/servicer concerning the terms of your student loan, you may contact the Department of Education Ombudsman via postal mail:

U.S. Department of Education

FSA Ombudsman Group
830 First Street, N.E., Mail Stop 5144

Washington, DC 20202-5144

• Alternatively, you may contact the Ombudsman by using the online submission form.

6. Don’t Fail to Repay your Student Loans

Student loan repayment is a long-term financial commitment with significant legal and financial consequences if ignored. Staying informed, communicating with your loan servicer, and seeking assistance early are essential to protecting your financial future.