Direct Loan Interest Rates

The College Cost Reduction and Access Act reduces the interest rates over the next four years for subsidized Federal Direct Loans made to undergraduate students only. The interest rates are as follows:

First Disbursement
made on or after:
but before:Interest Rate
Subsidized & Unsubsidized

Federal Direct Loan for
Undergraduate Students only


The interest rate for the Federal Unsubsidized Direct Loan for students in a Graduate/Professional degree will be:

  • 7.05% for loans disbursed on or after 07/01/2023 but before 07/01/2024
  • 6.54% for loans disbursed on or after 07/01/2022 but before 07/01/2023

Direct Loan Repayment

What may your loan payment look like?  
Use the following loan chart as a guide:

Amount of
Loan Borrowed
Number of
Monthly Payment
Amount – 6%
Monthly Payment
Amount – 7%
Monthly Payment
Amount – 8%
Monthly Payment
Amount – 9%

To help you determine your future payments based on your Federal Direct Loan balance, go to   Log on using your FSA ID Username or e-mail address and your FSA ID password.  Under Tools and Calculators, click on Repayment Estimator

You may also view the report for Average Student Debt Incurred at USM, by Graduation Year

Loan Default

Students who are currently in default cannot receive any federal student aid and the default will be reported to credit agencies, affecting your ability to apply for any other forms of credit. Contact the U.S. Department of Education at 1-800-4FEDAID if you are in default or if you have questions regarding the status of past loans.      

Click here for helpful suggestions for Default Management (PDF -83kb)

University of Southern Maine’s FY 2020 Cohort Default Rate is 0.0%. A cohort default rate is the percentage of a school’s borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year. Please note, if you do not meet your loan payments you risk going into default.