Federal Direct Unsubsidized Loans
Federal Direct Unsubsidized Loans are offered by the U.S. Department of Education to help eligible graduate students cover the cost of their education. Here is what makes them worth understanding:
Fixed interest rate — your rate is set at the time of disbursement and doesn’t change over the life of the loan.
No financial need required — unlike some other forms of aid, eligibility for unsubsidized loans is not based on demonstrated financial need.
Interest accrues during enrollment — because these loans are unsubsidized; interest begins accumulating from the date of disbursement, even while you are still in school. You can choose to pay the interest while enrolled to reduce your total repayment amount or allow it to capitalize, meaning it is added to your principal balance when repayment begins.
Borrowing limits apply — the amount you can borrow is subject to annual and lifetime limits set by federal law.
Important: New Loan Limits Beginning July 1, 2026
Federal loan limits for graduate students are changing significantly under the One Big Beautiful Bill Act (OBBBA). Beginning with the 2026–2027 academic year, new annual and lifetime caps apply to Direct Unsubsidized Loans for graduate and professional students:
Graduate (non-professional) students: up to $20,500 per year, with a lifetime graduate-level cap of $100,000
Professional students (law, medicine, chiropractic, pharmacy, and other federally defined professional programs): up to $50,000 per year, with a lifetime professional-level cap of $200,000
Combined lifetime cap: $257,500 across all federal loan types, regardless of program level
Additionally, Graduate PLUS Loans are no longer available to new borrowers for terms beginning on or after July 1, 2026. Students who borrowed a federal direct loan before July 1, 2026, while enrolled in their current program may qualify for a legacy provision that allows continued access to previous loan limits for up to three years. Continuous enrollment is required to maintain this provision.
These changes do not affect loans already disbursed for the 2025–2026 academic year.
A Note on Borrowing Wisely
Federal loans are a valuable tool, but they are still debt, and the decisions you make now will follow you into repayment. A few things worth keeping in mind:
Borrow only what you need. The amount offered on your Financial Aid Notification is a maximum, not a recommendation. Every dollar you don’t borrow is a dollar you won’t need to repay with interest.
Interest accrues from day one on unsubsidized loans. Paying even a small amount of interest while you are in school can meaningfully reduce your total repayment cost.
Understand your repayment options before you borrow. Federal loans offer income-driven repayment plans, deferment, forbearance, and forgiveness programs. Knowing these exist before you graduate makes it easier to plan. Visit our Loan Repayment page for a full overview.
What Comes Next
Once your MPN and Entrance Counseling are complete, your loan funds will be disbursed directly to University of Western States and applied to your student account approximately one week before the start of each term. If your aid exceeds your direct charges, any remaining balance will be refunded to you. Visit our Aid Disbursement & Refunds page for details on timing and how refunds work.
Questions About Federal Loans?
Whether you are trying to understand your eligibility, figure out how the new loan limits affect your program, or just want to talk through your options before making a decision, our financial aid team is here for exactly that.
Support When You Need It
The Office of Financial Aid is here to help you explore your options, to answer questions, and to create a plan that works for you.
Contact the Office of Financial Aid at [email protected] or call 971-449-9223.