The Direct Loan Program allows eligible students to borrow funds directly from the Federal Government without a credit check. Students must generally be enrolled at least half-time (6 or more credits for undergraduate students; 3 or more credits for graduate students) each semester to remain eligible for Direct Loans.
Under the new OB3 regulations, students enrolled less than full-time may have their federal loan eligibility reduced or prorated based on their enrollment status. Loan amounts are determined by federal annual limits, cost of attendance, financial need, and enrollment level. Direct Loans may be awarded as subsidized, unsubsidized, or a combination of both depending on eligibility and level of study.
In order to be considered for Federal and State Grant funds, students must first complete the Free Application for Federal Student Aid (FAFSA) by the specified deadlines.
A variety of private (nonfederal) alternative educational loans are also available from individual lending institutions. For your convenience, lenders that have provided alternative loans to UMES students within the past three years can be found online by utilizing ELM Select.
Federal Direct Loans
The Direct Loan Program allows eligible students to borrow funds directly from the Federal Government without a credit check. Students must generally be enrolled at least half-time (6 or more credits for undergraduate students; 3 or more credits for graduate students) each semester to remain eligible for Direct Loans.
Under the new OB3 regulations, students enrolled less than full-time may have their federal loan eligibility reduced or prorated based on their enrollment status. Loan amounts are determined by federal annual limits, cost of attendance, financial need, and enrollment level. Direct Loans may be awarded as subsidized, unsubsidized, or a combination of both depending on eligibility and level of study.
- Direct Subsidized Loans are awarded to undergraduate students based on financial need. Interest on the loan is subsidized by the Federal Government during the student’s enrollment and grace period.
- Direct Unsubsidized Loans are non-need-based loans awarded to graduate and undergraduate students. Accrued interest is the responsibility of the student during enrollment and grace period.
First-time Federal Direct Loan borrowers are required to complete an Entrance Counseling session and a Master Promissory Note (MPN), before loan funds may be disbursed. Both may be completed online at Federal Student Aid.
Note: Federal regulations required disbursements to 1st-time, 1st-year, Direct Loan borrowers must be delayed 30 days from the first day the semester begins.
Students generally begin repaying principal loan funds six months after graduating, withdrawing, or ceasing half-time enrollment. While most borrowers repay their loans within the standard ten-year repayment period, various repayment options exist.
Annual Federal Direct Loan Limits
| Undergraduates* | Dependent | Independent* |
|---|---|---|
| Freshman (0-27 credits) | $5,500 | $9,500 |
| Sophomore (28-55 credits) | $6,500 | $10,500 |
| Junior & Senior (56+ credits) | $7,500 | $12,500 |
| Graduate | N/A | $20,500 |
| Professional/Pharmacy | N/A | $37,167 |
*For undergraduate Direct Loans, the subsidized portion (based on need) cannot exceed: $3,500 for freshmen, $4,500 for sophomores, or $5,500 for juniors and seniors.
*Dependent students whose parents are unable to obtain a PLUS Loan are eligible for Additional Unsubsidized Loans up to the independent student level amount.
Aggregate Federal Direct Loan Limits
| Undergraduates | Dependent | Independent* |
|---|---|---|
| Subsidized | $23,000 | $23,000 |
| Subsidized/Unsubsidized Combo | $31,000 | $57,500 |
| Graduate/Undergraduate Combo | $65,500*** | $138,500 |
| Professional/Pharmacy | N/A | $224,000 |
*Dependent students who were awarded Additional Unsubsidized Loans due to parent’s ineligibility for PLUS Loans are limited to independent student aggregate levels.
**This includes graduate-level subsidized loans which were discontinued as of July 1, 2012.
Once a student has reached their annual or Aggregate Direct Loan limits, s/he must explore alternative funding options.
Federal Direct PLUS Loan (Parent and Graduate)
Parents of dependent undergraduate students may borrow a Federal Parent Loan for Undergraduate Students (PLUS) to assist with educational expenses. Graduate and professional students have historically been able to borrow through the Graduate PLUS Loan Program to supplement their educational funding.
While Federal Direct Loans are subject to annual and aggregate borrowing limits, eligible PLUS borrowers have traditionally been permitted to borrow up to the student’s cost of attendance minus all other estimated financial assistance. Students must be enrolled at least half-time for a borrower to receive a PLUS Loan, and a valid FAFSA must be submitted.
Under the new OB3 regulations, annual borrowing limits have been established for Parent PLUS borrowers. Parents of new students are limited to borrowing up to $20,000 annually through the Parent PLUS Loan Program, while certain continuing or legacy students may remain eligible under previous federal provisions based on transition rules.
Additionally, Graduate PLUS Loans are now limited to legacy graduate/professional students already enrolled prior to the implementation of the new regulations. Graduate students beginning enrollment on or after July 1 under the new OB3 rules are not eligible to receive Graduate PLUS Loans.
Prospective PLUS borrowers must complete the online PLUS Application through the Federal Student Aid website. If an applicant is denied due to adverse credit history, the borrower may still qualify by obtaining a creditworthy endorser (excluding the student in the case of parent borrowers). Once approved, the borrower must also complete a Direct PLUS Master Promissory Note (MPN) through the Federal Student Aid website.
Parent PLUS Borrowers
- If an endorser is needed, the student cannot be the endorser.
- If you are approved with an endorser, you must complete PLUS Credit Counseling.
- If you are denied PLUS and choose not to apply with an endorser, the Office of Financial Aid will offer the student an Additional Federal Direct Unsubsidized Loan ($4,000 for freshmen and sophomores; $5,000 for juniors and seniors).
- On the PLUS application, you will be given the option of delivering any credit balance (refund) to yourself or to the student after the funds are disbursed.
Graduate PLUS Borrowers
- Independent students enrolled in an eligible certification program are ineligible for a Graduate PLUS Loan, which is made available to students enrolled in a program leading to a Masters or Doctorate degree.
- The Direct PLUS MPN is separate from the Subsidized/Unsubsidized MPN that is required for the Direct Unsubsidized Loan.
- Under OB3 regulations, Graduate PLUS Loan eligibility is limited to legacy students who were enrolled in an eligible graduate or professional program prior to July 1, 2026. Students who begin a new graduate or professional program on or after July 1, 2026 are not eligible for Graduate PLUS funding. Additionally, independent students enrolled in certificate or non-degree programs remain ineligible, as Graduate PLUS Loans are restricted to students pursuing a master’s or doctoral degree.
Interest Rates for Federal Direct and PLUS Loans First Disbursed on or after July 1, and before October 1.
| Loan Type | Borrower | Interest Rate |
|---|---|---|
| Federal Direct Subsidized | Undergraduate | 6.52% |
| Federal Direct Unsubsidized | Undergraduate | 6.52% |
| Federal Direct Unsubsidized | Graduate/Professional | 8.07% |
| Direct Plus | Graduate/Professional or Parent of Undergraduate | 9.07% |
The above interest rates are fixed for the life of the loan. For rates of Direct Loans first disbursed before July 1, click here
Most federal student loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted proportionately from each loan disbursement you receive. This means the money you receive will be less than the amount you actually borrow. You’re responsible for repaying the entire amount you borrowed and not just the amount you received.
For loan fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after Oct. 1, click here
Interest rates are fixed for the life of the loan and are established annually by federal law. Rates listed above apply only to loans first disbursed between July 1, 2026 and June 30, 2027.
Cohort Default Rate
Cohort Default Rate
A school’s cohort default rate is the percentage of a school’s borrowers who enter repayment on Federal student loans during that fiscal year and default. Cohort default rates are based on federal fiscal years. Federal fiscal years begin October 1 of a calendar year and end on September 30th of the following calendar year. Each federal fiscal year refers to the calendar year in which it ends.
Default
Default is a student’s failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days. If you default on a federal student loan, you lose eligibility to receive federal student aid and you may experience serious legal consequences.
Cohort Default Rates
Cohort UMES’s Default Rate National Average
2022 0% 0%
2021 0% 0%
2020 0% 0%
2019 4.4%* 2.3%
*represents 45 out of 1,003 borrowers who entered repayment
Please refer to the Cohort Default Rate Guide for a more in-depth description of cohort default rates and see how UMES compares to other colleges.
