Federal Direct Loan Program

Stafford Loans are low-interest federal direct loans awarded to eligible students who file the Free Application for Federal Student Aid (FAFSA). You must be enrolled in a degree-seeking program for at least 6 credits in any given semester to qualify.

There are two types of loans: Subsidized and Unsubsidized Loans. Subsidized loans do not accrue interest until after graduation. Unsubsidized loans start accruing interest upon disbursement.

Department of Education is the lender for all federal student loans. Loans are disbursed by the Department of Education to the University 10 days before the start of classes each semester.

Loans are typically divided equally between fall and spring semesters. Depending on the program, loans can be split between summer, fall, and spring semesters. There are no strict yearly or aggregate borrowing limits, except for the total Cost of Attendance as determined by the school.


Subsidized loans are need-based loans awarded based on the FAFSA results. Eligibility for loans are based Expected Family Contribution (EFC) compared to total Cost of Attendance (COA), and other need-based aid received. Awards are based on the current year's FAFSA, subject to change based on need, funding, and regulations.

How to Apply

UMB does not automatically award Parent PLUS Loans. Follow the following steps to apply for the Parent PLUS Loans. 

  1. Complete the Free Application for Federal Student Aid FAFSA (Federal Title IV Code: 002104).
  2. Accept Awards in SURFs
  3. Fill out the Direct Loan Request Form
  4. Complete Entrance Counseling
  5. Complete Master Promissory Note (MPN) on StudentAid.gov.

Loan Terms

When taking out a federal student loan, it's important to understand the terms and conditions. Origination fees apply, meaning a portion of the loan amount is deducted upfront to cover administrative costs.

July 1, 2023 - June 30, 2024


Unsubsidized Origination Fee1 Grace Period2
Dependent Undergraduates 5.50% 5.50% 1.057% 6 months
Independent Undergraduates3 5.50% 5.50% 1.057% 6 months
Graduate Students N/A 7.05% 1.057% 6 months
Medical and Dental Students N/A 7.05% 1.057% 6 months

1Fee applies to loans first disbursed between Oct. 1, 2020 and Sept. 30, 2023 (was 1.059% 10/1/19-9/30/20)
2Amount of time after student graduates, drops below half-time status, or leaves school before first payment is due

Loan Limits

Program Annual Limits Aggregate Limits
  Subsidized1 Unsubsidized Combined2 Subsidized1 Unsubsidized1 Combined2
Dependent Undergraduates $5,500 $2,000 $7,500 $23,000 $8,000 $31,000
Independent Undergraduates 3 $5,500 $7,000 $12,500 $23,000 $34,500 $57,500
Graduate Students $0 $20,500 $20,500 $65,500 $73,000 $138,500
Medical & Dental Students $0 $40,500 $40,500 $65,500 $158,500 $224,000

1 If eligible
2 Total unsubsidized loan eligibility if student is not eligible for subsidized loans
3 These limits also apply to students whose parents were denied Parent Plus Loans


Interest on the loan begins accruing right after the first payment is made to the school. Repayment options offer flexibility, including the choice to defer payments while still in school. However, it's crucial to note that interest continues to accumulate daily, based on the remaining amount borrowed.

Calculating Interest

Divide your interest rate (converted to decimal) by 365.25 (number of days in a calendar year), this gives you the Interest Rate Factor. The interest rate factor for a 6.21 percent Stafford Loan is 0.000170021.

(Interest rate (converted to decimal) / 365.25 (number of days in a calendar year) = Interest Rate Factor)

Then multiply the Interest Rate Factor by your outstanding principal balance. This is the amount of interest that is accruing daily.

Interest Rate Factor x Outstanding Principal balance = Accruing daily