The William D. Ford Federal Direct Student Loan Program is a federal student loan program, sponsored by the U.S. Department of Education, that offers low interest rates and easy repayment terms. The Federal Direct Unsubsidized Loan is available to graduate students. The loan is not credit based, and only requires that students meet specific eligibility requirements. All students must file a Free Application for Federal Student Aid (FAFSA) in order for the Office of Financial Aid to determine eligibility for a Federal Direct Unsubsidized Loan. Depending on enrollment status, FAFSA results, cost of attendance, and other factors, an amount will be offered to eligible students. The federal government is the lender for student loans received through the Federal Direct Loan Program.
The One Big Beautiful Bill Act (OBBBA)—enacted into law on July 4, 2025—introduced significant changes to federal student loan eligibility and borrowing limits. Effective July 1, 2026, the Federal Direct Graduate PLUS Loan program is eliminated for new borrowers. A new borrower is one who did not receive a disbursement of any Direct Loans prior to July 1, 2026 in their current program of study.
- Loan Schedule of Reduction: This reduction will apply to all federal Direct and PLUS Loans. Loan amounts will be reduced in direct proportion to the percentage of full-time enrollment. Full-time enrollment for graduate students is nine (9) or more credits.
- OBBBA Legacy Provisions: Current students who received Direct Loans in their current program of study as of June 30, 2026 may continue under the existing rules until the expected time to completion of their current program or three (3) academic years until July 1, 2029, whichever is less. Under the legacy provisions, students can borrow Graduate PLUS Loans and are subject to the $138,500 aggregate loan limit.
The Department of Education has developed a process that all Direct Loan borrowers (subsidized, unsubsidized, and PLUS) are encouraged to complete, called the Annual Student Loan Acknowledgement (ASLA). The ASLA is intended to better assist borrowers in understanding the financial responsibility of funding their education and provide current information on a borrower's cumulative loan balance. As part of the Master Promissory Note (MPN) confirmation process, the ASLA allows student and parent borrowers to view how much they currently owe in federal student loans, and to acknowledge that they have seen these amounts, before borrowing new loans each award year. The ASLA may be completed each year in addition to Direct Loan Entrance or PLUS Credit counseling that may be necessary. The ASLA becomes available for completion online each April.
Borrowers are responsible for all interest that accrues on the Federal Direct Unsubsidized Loan, and have the option to pay the interest on their loans while in school or let interest accrue until repayment begins (known as capitalization). Applicants must be enrolled in at least half-time attendance (minimum six graduate-level credits per semester) to be eligible for Federal Direct Unsubsidized Loans and to maintain eligibility for "in-school" deferment status.
Graduate students may borrow up to $20,500 per academic year from the Federal Direct Unsubsidized Loan Program. If graduate students are taking undergraduate prerequisite courses, a Preparatory Coursework form must be completed with their academic advisor and submitted to the Office of Financial Aid. Enrolled graduate students taking undergraduate preparatory coursework (concurrently while in a graduate program) may be eligible to receive undergraduate Direct Subsidized and Unsubsidized Loans. The total combined undergraduate and graduate loan limit for the Direct Loan program (subsidized and unsubsidized loans) is $138,500, of which no more than $65,500 can be subsidized for current students who have previously received Direct Loans for their program
Graduate students who qualify for Federal Direct Loans through preparatory coursework are only eligible to receive up to a total of $12,500 in Federal Direct Loans for the academic year, of which no more than $5,500 may be subsidized (depending on eligibility determined by FAFSA results). Graduate students receiving undergraduate Federal Direct Loans through preparatory coursework are subject to the undergraduate federal loan lifetime aggregate limits for independent students. Undergraduate independent students are eligible to receive up to a total of $57,500 in Federal Direct Loans for their lifetime, of which no more than $23,000 may be subsidized (depending on eligibility determined by FAFSA results).
Loan repayments will not be required while students maintain at least half-time (minimum six credits) attendance. Repayment starts six months after students leave school or drop below half-time attendance. Interest on Direct Unsubsidized Loans begin to accrue when the loan is fully disbursed, and students may start repayments at any time.
Effective for Federal Direct Loans first disbursed on or after July 1, 2006, the interest rate is fixed. Prior to this date, Federal Direct Loan interest rates were variable. Federal Direct Loan interest rates change from year to year (in July) and may also change specifically for one type or the other; Subsidized, Unsubsidized, or PLUS. For loans disbursed after July 1, 2025, the interest rate for Unsubsidized Loans for graduate students is 7.94 percent. Students who received loans prior to the aforementioned dates and who still have balances outstanding on those loans will continue with the interest rate rules in effect at the time of their original loans. Borrowers will also be charged an origination fee. The origination fee represents the lender's (the federal government) fee for making the loan. For loans disbursed on or after October 1, 2020, the origination fee is 1.057 percent.
Annual and Aggregate Graduate Limits: Direct Unsubsidized Eligibility Only
- Annual: $20,500 (Ineligible for Subsidized Loans)
- Aggregate: $138,500 (Including undergraduate and graduate combined)
- Legacy Provision: If a borrower has a Federal Direct Loan made before July 1, 2026 while enrolled in a program of study, the current loan limits continue to apply for three (3) academic years until July 1, 2029, or the remainder of their expected time to credential, whichever is less.
Annual and Aggregate Graduate Limits For New Borrowers
Effective July 1, 2026, the One Big Beautiful Bill Act introduces new aggregate loan limits:
- Annual: $20,500 (Unsubsidized loans only)
- Aggregate: $100,000 (Does not include amounts borrowed as an undergraduate student)
- Borrowers who are both graduate and professional students at some point in their educational careers may only borrow up to $200,000 in total for graduate and professional school.
- A separate lifetime limit of $257,500 applies to all federal student loans (excluding Parent PLUS Loans, but including Graduate PLUS Loans).
The One Big Beautiful Bill Act (OBBBA) which was signed into law on July 4, 2025, introduced changes to federal student aid programs, some of which become effective July 1, 2026, and/or are not finalized as of the date of this publication. New York Institute of Technology is continuously monitoring regulations to provide up-to-date information. Please visit our Office of Financial Aid and OBBBA pages for more information. Updates are also available at studentaid.gov.