Federal Student Loans
Federal student loans are funded by the U.S. Department of Education and may offer eligible students long-term, low-interest financing and benefits that may not be available with most private loans.
Most students become eligible for federal student loans by completing the Free Application for Federal Student Aid (FAFSA) each year.
Types of Federal Student Loans
Direct Subsidized Stafford Loans
Direct Subsidized Loans are available to eligible undergraduate students who demonstrate financial need. The student is not responsible for paying the interest on these loans while enrolled at least half-time or during certain deferment periods, making them a lower-cost borrowing option for qualifying students.
Direct Unsubsidized Stafford Loans
Direct Unsubsidized Loans are available to eligible undergraduate and graduate students regardless of financial need. Interest begins accruing when the loan is paid out, and students are responsible for all interest that accrues over the life of the loan. Borrowers can choose to pay the interest as it accrues or allow it to be added to the loan balance.
Direct Parent PLUS Loans
Direct Parent PLUS Loans are available to parents of dependent undergraduate students. These loans require a credit check and may help cover educational expenses not already met by other financial aid resources.
To receive a Direct Parent PLUS Loan, the student must complete the FAFSA each academic year. The eligible parent borrower must then complete a Direct PLUS Loan Application each academic year. An eligible parent borrower is generally the student’s biological or adoptive parent, or a stepparent who is married to the student’s custodial parent.
If the parent borrower is denied a Direct Parent PLUS Loan, the dependent student may be eligible for an additional Direct Unsubsidized Loan.
Direct Graduate PLUS Loans
Direct Graduate PLUS Loans are available to eligible graduate or professional students. These loans require a credit check and can help cover educational expenses after other financial aid has been applied.
To receive a Direct Graduate PLUS Loan, the student must complete the FAFSA each academic year. The student must then complete a Direct PLUS Loan Application each academic year.
Beginning July 1, 2026, Graduate PLUS Loans are no longer available to new borrowers under updated federal loan program rules. Only students who qualify for the legacy provision may have remaining eligibility.
Who is Eligible for Federal Student Loans?
To receive federal student loans, students must meet general federal student aid eligibility requirements.
Enrollment Requirement: Students must be enrolled at least half-time in an eligible program to receive federal student loans.
- Undergraduate students: At least 6 credit hours per semester
- Graduate students: At least 5 credit hours per semester
Want to learn more about federal aid eligibility? View the full list of requirements.
View Federal Aid Eligibility Requirements
How to Apply for Federal Student Loans
- Submit the Free Application for Federal Student Aid (FAFSA) each academic year
- Submit any additional required documents
- Check your Financial Aid Dashboard in your myState account for any loan offers
- Accept any available loan offer in your Financial Aid Dashboard. Students may accept a partial amount of their offered loan or decline it.
- Complete Entrance Counseling, if required.
- Sign a Master Promissory Note (MPN), if required.
Loan Entrance Counseling
Loan Entrance Counseling ensures you understand the terms and conditions of your federal student loan and your rights and responsibilities as a borrower. Entrance counseling is required for first-time Direct Loan borrowers before receiving their first federal student loan. You’ll learn what a loan is, how interest works, your repayment options, and how to avoid delinquency and default.
Complete Loan Entrance Counseling
Master Promissory Note (MPN)
The Master Promissory Note (MPN) is a legal agreement in which the student or parent borrower agrees to repay the loan and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of the loan. In most cases, the MPN remains valid for multiple years. If your MPN expires you will need to complete a new one.
Complete Master Promissory Note
*Both the Loan Entrance Counseling and the MPN must be completed before federal student loan funds can be applied to a student’s account.
Undergraduate Student Loan Limits
The amount undergraduate students can borrow each year through the federal loan programs depends on a grade level and dependency status. Federal student loans have annual borrowing limits and lifetime (aggregate) borrowing limits.
A student's actual eligibility may be lower based on their enrollment status, cost of attendance, and other financial aid received.
Annual and Aggregate Loan Limits for Undergraduate Students
| Grade Level | Dependent Students | Independent Students |
| Freshman |
Up to $5,500 A maximum of $3,500 may be subsidized |
Up to $9,500 A maximum of $3,500 may be subsidized |
| Sophomore |
Up to $6,500 A maximum of $4,500 may be subsidized |
Up to $10,500 A maximum of $4,500 may be subsidized |
| Junior/Senior |
Up to $7,500 A maximum of $5,500 may be subsidized |
Up to $12,500 A maximum of $5,500 may be subsidized |
| Aggregate Loan Limits |
$31,000 A maximum of $23,000 may be subsidized |
Up to $57,500 A maximum of $23,000 may be subsidized |
Graduate Student Loan Limits
Graduate and professional students may borrow federal student loans through the Federal Direct Unsubsidized Loan program. Eligibility is based on program level, enrollment status, and federal loan regulations. Graduate students are not eligible for Direct Subsidized Loans.
A student’s actual loan eligibility may be lower than annual and aggregate limits based on enrollment status, cost of attendance, and other financial aid received.
Beginning July 1, 2026, federal student loan limits for graduate and professional students will change under recent federal legislation, including updated annual and lifetime borrowing caps.
Students should refer to the One Big Beautiful Bill Act information page for a detailed summary federal student aid changes.
Learn About Federal Loan Changes
Previous Loan Limits (Through June 30, 2026)
Graduate Students
- Annual limit: Up to $20,500
- Aggregate limit: $138,500
Professional Students
- Annual limit: Up to $40,500
- Aggregate limit: $224,000
Only students who qualify for the legacy provision may have remaining eligibility under the previous loan limits.
Updated Loan Limits (Beginning July 1, 2026)
Graduate Students
- Annual limit: Up to $20,500
- Aggregate limit: $100,000
Professional Students
- Annual limit: Up to $50,000
- Aggregate limit: $200,000
Lifetime Federal Direct Loan Limit
The Lifetime Federal Direct Loan Limit is the total amount a student can borrow in federal Direct Loans throughout their entire college career. The Lifetime Federal Direct Loan Limit is $257,500. Once a student reaches this limit in total federal borrowing, they cannot receive additional federal Direct Loans. The lifetime limit includes all federal loans the student may have borrowed including, undergraduate, graduate, and/or professional.
Federal Loan Interest Rates
Federal Direct Loan interest rates are set by the U.S. Department of Education each year and remain fixed for the life of the loan once disbursed.
Federal Loan Interest Rates 2026-27
For federal loans disbursed between July 1, 2026 and June 30, 2027, the interest rates are:
- Subsidized and Unsubsidized - Undergraduate: 6.52%
- Unsubsidized - Graduate/Professional: 8.07%
- Parent PLUS: 9.07%
- Graduate PLUS: 9.07%
Federal Loan Interest Rates 2025-26
For federal loans disbursed between July 1, 2025 and June 30, 2026, the interest rates are:
- Subsidized and Unsubsidized - Undergraduate: 6.39%
- Unsubsidized - Graduate/Professional: 7.94%
- Parent PLUS: 8.94%
- Graduate PLUS: 8.94%
Loan Exit Counseling
Students who graduate, leave Mississippi State University, or drop below half-time enrollment are generally required to complete Exit Counseling for their federal student loans. Exit Counseling provides information about loan repayment, estimated monthly payments, and options for managing your loans.
Loan Deferment
Students enrolled at least half-time at an eligible college or career school may qualify for an automatic in-school deferment of their federal student loans. For more information about in-school deferment, visit Federal Student Aid.
Repayment
Federal student loan repayment begins after you graduate, leave school, or drop below half-time enrollment. Once repayment starts, you will make payments directly to your assigned federal loan servicer. Your servicer is responsible for billing, collecting payments, and helping you manage your repayment plan options.
Use the tools provided by the U.S. Department of Education below to estimate your loan payments and explore repayment options.
Estimate Your Payments (Loan Simulator) View Federal Repayment Plans
Frequently Asked Questions
What are federal student loans?
Federal student loans are funds provided by the U.S. Department of Education to help students pay for college or career school. These loans must be repaid with interest.
What is the difference between a Subsidized and Unsubsidized Loan?
Direct Subsidized Loans are available to eligible undergraduate students with demonstrated financial need. The federal government pays the interest while the student is enrolled at least half-time and during certain other periods. Direct Unsubsidized Loans are not based on financial need, and interest begins accruing when the loan is disbursed.
How do I accept my federal student loans?
Mississippi State University students can accept, reduce, or decline their federal student loans through their Financial Aid Dashboard in their myState portal. Accepted loans may require additional steps, such as completing Entrance Counseling and a Master Promissory Note, before funds can be disbursed.
How much am I allowed to borrow in federal student loans?
Borrowing limits depend on your grade level, dependency status, and program type. Federal student loans have annual and lifetime (aggregate) borrowing limits. Actual eligibility may be lower based on cost of attendance and other financial aid received.
How much should I borrow in federal student loans?
Students are encouraged to borrow only what is needed to cover educational expenses. Federal student loans must be repaid with interest, so it is important to consider your total cost of attendance and future repayment obligations before accepting the full amount offered.
Do I have to make payments on federal loans while I am in school?
In most cases, no. Federal student loan payments are not required while you are enrolled at least half-time. For most loans, repayment begins after you graduate, leave school, or drop below half-time enrollment. However, interest may still accrue depending on the type of loan.
Who do I make my loan payments to?
Federal student loan payments are made directly to your assigned loan servicer. Your loan servicer manages billing, repayment plans, and payment support.
How can I estimate my future loan payments?
Students can use the U.S. Department of Education’s Loan Simulator and repayment tools to estimate monthly payments and compare repayment plans.