Answered By: Abigail Caraccio
Last Updated: Feb 13, 2018     Views: 228

Federal Direct Unsubsidized Loans require that the student pay the accruing interest while enrolled in school.  You can arrange to postpone the interest payment by checking the appropriate box indicated on the Master Promissory Note. However, you should carefully consider this option. The interest will be capitalized, which means it will be added to your principal amount and increase the amount of your debt. Unsubsidized loans will carry an interest rate of 6.8% for undergraduate and graduate students.


Both the subsidized and unsubsidized loans have a 1% loan origination fee deducted from each disbursement of the loan.


Students typically have a 6-month repayment grace period after graduating, leaving school, or dropping below half-time status. After this time has expired, payments must be made to your lender. During the grace period, interest is not charged on subsidized loans but continues to be charged on unsubsidized loans. Payments are usually due on a monthly basis.


Direct Loan are not credit based. Typically, you may borrow up to your maximum annual loan limit every award year (i.e., 9 months for quarter-based, 12 months for semester-based programs). Loan funds can be used to cover direct education costs such as tuition, fees, and room and board, as well as indirect costs, such as books and other education-related expenses.


Please note that Federal Direct Loans borrowed while enrolled at another institution may impact your loan eligibility at Walden University.

For more information on this topic, please contact The Office of Financial Aid at

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