Federal Direct Subsidized Loans

The Federal Direct Subsidized Loan is offered to meet financial need after other resources are taken into consideration. Maximum annual loan limits apply and may limit the amount that you may borrow.

The interest rate for Federal Direct Subsidized Loans is variable and changes annually on July 1. There is also an origination fee that will be deducted before the loan proceeds are sent to the school. The origination fee is a processing fee assessed by the Department of Education.

Repayment of the loan begins six months after you are no longer enrolled at least half-time (six credits) and the federal government pays interest on the loan on your behalf during eligible periods of enrollment.

Students must accept their Federal Direct Subsidized Loan online via their myUMBC account before it can be considered as payment toward their bill. For more information on how to accept loans online, please visit our Loan Acceptance page.

Loan Eligibility Requirements

  • You must be meeting Satisfactory Academic Progress (SAP) standards
  • You must be enrolled for at least six credits
  • You must be working toward a degree or approved certificate at UMBC
  • A current year FAFSA is required
    • If the FAFSA is selected for verification, all required documents must be submitted and reviewed before the loan can be processed

Accessing the Federal Direct Subsidized Loan

After submitting your FAFSA, If you are eligible for a Federal Direct Subsidized Loan, it will be included in your financial aid offer.

If you are a first-time loan borrower, the following steps must be taken prior to your loan being processed:

In most cases, you will only be required to complete the Master Promissory Note (MPN) and Entrance Counseling once during their college career.

If you have borrowed a loan in a prior year, and have already completed both your MPN and Entrance Counseling, the following steps must be taken prior to your loan being processed:

Generally, a federal loan will be available throughout the academic year during which is was offered. However, depending upon the term to which you would like the funds to apply, priority processing and final deadlines do apply. For more information, please visit our Federal Loan Deadlines page.

Annual Student Loan Acknowledgement

As a Federal Direct Loan borrower, it’s important for you to remain fully informed of your loan borrowing and repayment. Effective with the 2021-2022 academic year, it is strongly encouraged that you complete the federal Annual Student Loan Acknowledgement. The Acknowledgement will inform you of your total loan borrowing to date (if any) and assist with planning for future borrowing by offering information about estimated monthly payments when repaying the loans.

Reduce or Cancel a Federal Direct Subsidized Loan

You may reduce or cancel a Direct Subsidized Loan online via your myUMBC account if it has not yet disbursed. If the loan has already disbursed, you should complete the Loan Decrease/Cancel Request Form no later than 14 days after you receive notification that your loan has disbursed.

It is best to make the adjustments online or submit the form to our office for processing well before the funds are set to disburse to your billing account in order to avoid complications with the return of these funds.

Federal Direct Student Loan Disclosure Statements

Students receiving any type of federal direct loan will receive a Disclosure Statement from the Federal Loan Origination Center for each new loan. The disclosure statement will provide comprehensive information about the type(s) of loan(s), loan amounts, the loan period, and anticipated disbursement dates. You should save every Disclosure Statement your receive for future reference, and can also access them online at any time by logging in to studentaid.gov with your FSA ID.