Direct Unsubsidized Loans

You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Like Direct Subsidized Loans, the amount you can borrow will be determined by Baylor.

Interest accrues (accumulates) on an unsubsidized loan from the time it’s first disbursed. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan).

If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.

Annual and Aggregate Loan Limits

The annual loan limit amounts are the maximum yearly amounts you can borrow in both Subsidized and Unsubsidized Direct Loans. You can have one type of loan or a combination of both. Because you can't borrow more than your cost of attendance minus any other financial aid you'll get, you may receive less than the annual maximum amounts. Also, the annual loan limits assume that your program of study is at least a full academic year.

Remember, only borrow what you need; you can borrow less than you are offered each year. If you have advanced a grade level by the end of the spring (freshman to sophomore or sophomore to junior), you may be eligible to borrow an additional $1000 for the summer.

If you borrow the maximum allowed each year for four years, but then find you need a fifth year of study you will reach the aggregate limit and will be limited in the amount you can borrow during your fifth year.

With careful planning allowing you to graduate on time or early, you will not reach the aggregate limit. Click here to view a sample loan disclosure statement. You will receive a statement specific to your loan before your loan is disbursed.

Click here to view maximum annual and aggregate (total) loan limits for Direct Subsidized and Unsubsidized Loans.

Loan Fees and Interest Rates

The total origination fee for Subsidized and Unsubsidized Loans is 1.062% of the amount borrowed for loans disbursed after October 1, 2018. The origination fee will change effective October 1, 2019.

The interest rate for undergraduates on Direct Subsidized and Unsubsidized Loans borrowed on or after July 1, 2018, and before July 1, 2019, is 5.05%.

The interest rate for graduate students on Direct Unsubsidized Loans borrowed on or after July 1, 2018 and before July 1, 2019 is 6.6%.

New rates will be established each June for the upcoming year. The interest rate for a loan will apply for the life of the loan (fixed-rate). As a result, it is likely you will have a set of fixed-rate loans, each with a different interest rate.

Right to Decline Loans

You have the right to decline any financial aid that you are offered. You have a number of rights and responsibilities pertaining to borrowing student loans. Click here for a list of important rights and responsibilites of which you should be aware.

Master Promissory Note(MPN)

You must sign a Direct Loan Master Promissory Note. This will be the only promissory note you will have to sign as long as you continue to attend Baylor. Your FSA ID is required in order to eSign. Go to and log in with your FSA ID to sign the MPN.

Entrance Counseling

Complete Direct Loan entrance counseling one time after you have been offered a Direct Subsidized or Unsubsidized Loan and accepted the offer. Go to and sign in with your FSA ID to complete entrance counseling.

Exit Counseling

Exit counseling is required when you cease to be enrolled at least half-time. If you drop below half-time hours, withdraw, graduate, or stop attending, you are required to complete exit counseling by logging in with your FSA ID at


When you receive your first Direct Loan, you will be contacted by the servicer for that loan (you repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your Direct Loan, and any additional Direct Loans that you receive. If you’re not sure who your loan servicer is, you can look it up on

After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you begin repayment.

The interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014, has been eliminated. If you received a subsidized loan during this timeframe, you are responsible for the interest that accrues while your loan is in the grace period.

You do not have to make payments during the grace period (unless you choose to) but the interest will be added (capitalized) to the principal amount of your loan when the grace period ends. During this period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly.