Puget Sound participates in the Federal Direct Student Loan program. Under this program the federal government serves as the lender. The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan. View an interest rate chart.

There are two types of Federal Direct loans.

  • Subsidized Direct loans are need-based loans. The government pays the interest on these loans while you are enrolled at least half-time.
  • Unsubsidized Direct loans are not need-based loans. The interest begins accumulating as soon as the funds are disbursed on your behalf. Interest may be paid on a monthly basis or capitalized so that payments do not need to be made while you are enrolled. Capitalization results in the interest being added to the principal creating a higher loan to repay after graduation.

How to Apply

Your Financial Aid Award Notice specifies the amount of your Direct Loan eligibility. You may reduce or decline the offered amount by sending an email to sfs@pugetsound.edu.

First Time Borrowers

If you are a first-time borrower, you must complete an online loan entrance counseling session and sign a Master Promissory Note (MPN) before you can receive your loan funds.

Disbursement of Funds

The annual loan amount you borrow for the year is divided equally between fall semester and spring semester. A fee, that is a percentage of the loan amount, will be subtracted proportionately from each disbursement. A chart of the fees for Direct Loans based on disbursement date is available. Direct loans are received by the university through Electronic Fund Transfer (EFT) and are credited to your student account automatically. We will notify you when funds are received and credited to your student account.

Subsidized Direct Loans for Graduate Students

The Budget Control Act of 2011 included changes to several aid programs, including the Direct Loan program for graduate students. Effective July 1, 2012, graduate students will be limited to borrowing through the Unsubsidized Direct Loan program, and the Subsidized Direct Loan program will no longer be available. Annual and aggregate loan limits remain unchanged. Under the Unsubsidized Direct program, loans begin accruing interest as soon as the funds are disbursed. Interest may be paid on a monthly basis or capitalized so that payments do not need to be made while enrolled. This change effects loans disbursed on or after July 1, 2012. Any previous Subsidized Direct loan held by the student will not be affected.


Repayment begins six months after graduation or when dropping below half-time enrollment. You can expect to hear from your lender/lenders about 30-45 days before the first payment is due. If you don't hear from your lender, it is your responsibility to contact them.

Exit Loan Counseling Session

If you borrowed a Federal Direct Loan, you are required to complete a loan exit counseling session before you graduate. This loan session will discuss loan repayment schedules, loan consolidation options, deferment processes, and grace periods.

Unsubsidized Direct Loans

We encourage students with Unsubsidized Direct Loans to make interest-only payments in order to minimize the capitalization of the interest, which accrues during enrollment. By paying just $20 - $80 per month, you could save thousands of dollars over the life of the loan.

Repayment FAQ

You will begin repayment six months after you graduate, withdraw, or drop to less than half-time status. Your first payment will be due approximately 30 to 45 days after this six month "grace period".

Helpful repayment links:

Your loan servicer will send you a repayment and disclosure statement listing your monthly payment, payment due dates, length of repayment, and current interest rate. Servicers will usually send your repayment information one or two months prior to the conclusion of your grace period.

If you received a loan prior to Summer 2009 through the Federal Family Educational Loan Program (FFELP), your loan would be serviced by the lender you chose when you signed your Master Promissory Note (MPN).

Federal loans received after Summer 2009 are Federal Direct Loans where the federal government serves as the lender. The Department of Education determines your servicer at the time your promissory note is completed and the loan is disbursed. For specific questions about loan repayment or deferment, you can contact your federal loan servicing center directly.

Visit studentaid.gov/servicer to learn about the role that student loan servicers play in the repayment process and which servicer handles your federal student loans.

You never have to pay for help with your federal student aid. Your student loan servicer provides free help with your questions or concerns about your loan payments.

Loan Servicer Contact Information

Direct Loan Servicing Center

Department of Education Student Loan Servicing Center (ACS)

FedLoan Servicing (PHEAA)

Great Lakes Educational Loan Services, Inc.



Sallie Mae

Direct Loan Limits

Student Type Annual Loan Limit
Dependent Student  
Freshmen $5,500
Sophomore $6,500
Junior or Senior $7,500
Cumulative Loan Limit $31,000
Independent Student  
Freshmen $9,500
Sophomore $10,500
Junior or Senior $12,500
Cumulative Loan Limit $57,500
Graduate Student $20,500
Cumulative Loan Limit $138,500
(includes undergraduate borrowing)