Skip to Content

Office of Financial Aid

Home > Loans and Payment Plans > Federal Student Loan Options for Undergraduate Students

Federal Student Loan Options for Undergraduate Students

IMPORTANT NOTE: It is our firm belief that families should borrow only when absolutely necessary, and then only to the extent that is needed. We encourage that serious and deliberate consideration be given to making any borrowing decision.

Federal Direct Subsidized/Unsubsidized Loans

How do I apply for this loan and am I eligible?

We ask that you first read all of the following information about Federal Direct Subsidized/Unsubsidized Loans. You may then contact our office at finaid@vanderbilt.edu if you need any further details or are interested in these loans. Please note that students must meet federal eligibility requirements to qualify for these loans.

If you have received a financial aid notification letter from our office and a Federal Direct Subsidized/Unsubsidized Loan has already been awarded to you, you may begin the application process. Please proceed to the U.S. Department of Education's website, www.studentloans.gov, to complete the Federal Direct Subsidized/Unsubsidized Loan Master Promissory Note and Entrance Counseling. You will need your FAFSA Pin Number in order to login to the website.

How much can I borrow?

Your eligibility is determined for either a Federal Direct Subsidized and/or Unsubsidized Loan. A Federal Direct Subsidized Loan is awarded on the basis of federal eligibility. If you are eligible for such a loan, the government will pay (subsidize) the interest on your loan while you are enrolled in school on at least a half-time basis.  Depending on your federal eligibility, you may borrow a Federal Direct Subsidized Loan in an amount up to the annual loan borrowing limit for your level of study (see below).

You may receive a Federal Direct Unsubsidized Loan in addition to the Federal Direct Subsidized Loan or if you don't have demonstrated federal eligibility.   Unlike a Federal Direct Subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it's repaid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest will obviously increase the amount you will have to repay over the life of the loan.

You can receive both a Federal Direct Subsidized and Unsubsidized Loan for the same enrollment period as long as the combined amount of the two loans doesn't exceed the annual loan limit as delineated below.

Borrowing limits applicable to eligible dependent undergraduate students:

  • As a first-year student, you can borrow up to $5,500 in combined Subsidized and Unsubsidized Loans, with a maximum of $3,500 being in the form of a Subsidized Loan (providing that you are eligible for Subsidized Loan assistance).
  • As a second-year student, you can borrow up to $6,500 in combined Subsidized and Unsubsidized Loans, with a maximum of $4,500 being in the form of a Subsidized Loan (providing that you are eligible for Subsidized Loan assistance).
  • As a third, fourth, or fifth-year student, you can borrow up to $7,500 in combined Subsidized and Unsubsidized Loans, with a maximum of $5,500 being in the form of a Subsidized Loan (providing that you are eligible for Subsidized Loan assistance).

The annual borrowing limits can be increased for students who meet the criteria to be considered independent for student financial aid purposes or whose parents have applied for and who were denied a Federal Direct PLUS Loan (see Federal Direct PLUS Loan information below).

What is the interest rate and what fees are charged for these loans?

Effective October 1, 2014, the interest rate for Federal Direct Subsidized/Unsubsidized Loans is fixed at 4.66%. For Federal Direct Subsidized and Unsubsidized Loans, there is an origination fee of 1.073% of the loan amount that will be deducted proportionately at each disbursement.

When do I begin repaying the loan?

Repayment of Federal Direct Loans plus any accumulated interest begins six months (called the grace period) after you drop below half-time enrollment status (normally, this occurs when you graduate or if you leave school for some other reason).

Federal Perkins Loans

How do I apply for this loan and am I eligible?

We ask that you first read all of the following information about Federal Perkins Loans. NOTE: Only those students who demonstrate an exceptional level of federal eligibility are eligible to receive this loan. Contact the Office of Student Financial Aid and  Scholarships at finaid@vanderbilt.edu if you need any more information or are interested in this loan. If you are awarded this loan, and you are a new Federal Perkins Loan borrower then you will need to complete the Perkins Entrance Counseling and Master Promissory Note. Begin the application process here.

How much can I borrow?

You can borrow up to $5,500 for each year of undergraduate study. The actual amount you may receive depends on your level of exceptional federal eligibility and the level/availability of Perkins Loan funds.

What is the interest rate and what fees are charged for this loan?

The interest rate is fixed at 5%. There are no other fees for this loan, and interest on the loan does not begin to accrue until the loan enters repayment.

When do I begin repaying the loan?

Repayment begins nine months (called the grace period) after you drop below half-time enrollment status (normally, this occurs when you graduate or if you leave school for some other reason).


Back Home   

Quick Links

Contact Us

Office of Student Financial Aid 
and Scholarships

2309 West End Ave.
Nashville, TN 37203-1725

Monday - Friday: 8:00 a.m. - 5:00 p.m.

On-campus: 2-3591
(615) 322-3591
1-800-288-0204
FAX: (615) 343-8512

finaid@vanderbilt.edu

©