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Federal Student Loans

Federal Direct Student Loans

Federal direct student loans are used by many students to help finance educational costs.

A subsidized loan does not accrue interest while you are in school. An unsubsidized loan does accrue interest while you are enrolled.

The amounts vary depending on the student's circumstances and other financial aid. Please contact us to determine your eligibility.

Independent students and dependent students whose parent was denied a PLUS loan may be able to borrow an additional $4,000 each year for their first and second years of school and an additional $5,000 each year for their third and fourth years of school.

Students who do not qualify for the subsidy may still apply and borrow under the unsubsidized program. For unsubsidized loans, interest accrues from the time the loan is disbursed. Students qualifying for the subsidized loan can generally also borrow through the additional unsubsidized program.

Students must maintain Satisfactory Academic Progress.

For more detailed information, please visit

Annual Borrowing Limits

The annual maximum loan amounts for dependent undergraduate students are indicated below.

Dependent Student Federal Direct Loan Limits
  Base Eligibility Additional Unsubsidized Eligibility Total Student Loan Eligibility Additional Unsubsidized Loan*
First Year $3,500 $2,000 $5,500 $4,000
Sophomore $4,500 $2,000 $6,500 $4,000
Junior & Senior $5,500 $2,000 $7,500 $5,000

*Independent students or a dependent student whose parent PLUS Loan has been denied may request the additional unsubsidized loan by contacting our office.

Aggregate (lifetime) Borrowing Limits

Dependency Status Maximum Subsidized Maximum Combined Subsidized & Unsubsidized
Dependent undergraduate $23,000 $31,000
Independent undergraduate $23,000 $57,500

The interest rates for subsidized and unsubsidized direct student loans for undergraduate students are fixed and set based on when the loan is first disbursed. The table below lists recent rates.

First Disbursed Subsidized Unsubsidized
July 1, 2019-June 30, 2020 4.53% 4.53%
July 1, 2020-June 30, 2021 2.75% 2.75%
July 1, 2021-June 30, 2022 3.73% 3.73%

The Department of Education charges origination fees on Direct Loans. Fees are deducted from (versus added to) Direct Loan amounts; therefore, net disbursements to tuition accounts are less than the loan amounts being borrowed (and which appear on award letters). Note that it is the gross loan amount that must be repaid. The fee rates for subsidized and unsubsidized Direct Loans are as follows:

First disbursed Oct. 1, 2018 through Sept. 30, 2019: 1.062%

First disbursed Oct. 1, 2019 through Sept. 30, 2020: 1.059%

First disbursed Oct. 1, 2020 through Sept. 30, 2021: 1.057%

First disbursed Oct. 1 2021 through Sept. 30, 2022:  1.057%

First-Time Borrowers

On or after you receive your finalized award letter beginning May 1, go to and complete:

  • Entrance Counseling (this provides information about your rights and responsibilities as a borrower)
  • Master Promissory Note

Smith will be notified electronically after you have completed these requirements.

Loan proceeds are applied to the student's account in two disbursements, one each semester.


Loan repayment begins after separating from school (graduation, withdrawal, leave of absence, leave for approved U.S. study) or dropping below half-time enrollment and a grace period.

The grace period is a period in which payments are not due and that lasts for six months unless reduced or depleted due to a previous separation in enrollment.

Subsidized loans disbursed prior to July 1, 2012 and after July 1, 2014 do not accrue interest during the grace period.  Unsubsidized loans and subsidized loans disbursed between July 1, 2012 and July 1, 2014 do accrue interest during the grace period.

The monthly payment amount is based on the amount borrowed and the payment plan that you select. If a payment is not selected, the default plan is the standard plan with a 10-year repayment period. Payments may not be less than $50 per month, therefore, the standard plan could be less than 10 years depending on the amount borrowed.

Students who have borrowed through the Federal Direct Student Loan programs are required to complete exit counseling if they are no longer enrolled at least half-time. Smith College will be notified electronically when this requirement has been completed. Visit for more information.