Loans are another type of financial aid offered to help students pay for college. It is money that you borrow and must be paid back with interest.
Compared to other loan options, Federal student loans offer many benefits. For more details on Federal loan benefits you may go to studentaid.gov. Students interested in receiving loans must be enrolled at least half-time and must complete a Loan Request Form.
Federal Direct Subsidized Loan
This is a federal student loan where the interest is subsidized by the U.S. Department of Education, while the student is enrolled in school at least half-time and during approved deferment periods. The interest will begin to accrue after you leave school. The interest rate for Federal student loans varies every year and is determined by the Federal Government. The interest rate of the loan when you received it will be the interest rate for the life of that loan. For the current interest rate and origination fee for Federal Direct Subsidized Loans, please visit studentaid.gov. To be eligible for this loan, students must demonstrate financial need. The Direct Subsidized loan amount will depend on the student’s academic level, amount of need, and existing subsidized loan balances.
Repayment is required to begin six months after the student drops below half-time status. For students who are not able to pay the minimum monthly amount, deferment options are available. Loan repayments are arranged with your loan servicer, which you can find at the National Student Loan Data System website.
Maximum Time Frame for Subsidized Loans
There is a maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. In general, you may not receive Direct Subsidized Loans for more than 150% of your maximum eligibility period. A maximum eligibility period is based on the published length of your program. If you change programs, the Direct Subsidized Loans you received for the previous program may count against your new maximum eligibility period. To prevent reaching your maximum eligibility period, make sure to have an academic plan. For more information, you may go to the Federal Student Aid Student Loans website.
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Federal Direct Unsubsidized Loan
This is a federal student loan that is available for students regardless of financial need. The Direct Unsubsidized loan amount will depend on the student’s academic level, dependency status, cost of attendance, and existing subsidized and unsubsidized loan balances. The loan interest begins to accrue once the loan is disbursed. In other words, you are responsible for paying the interest on a Direct Unsubsidized Loan during all periods. The interest rates for federal student loans varies each year and is determined by the Federal Government. The interest rate of the loan when you received it will be the interest rate for the life of that loan. View the current interest rate and origination fee for Federal Direct Unsubsidized Loans.
You have the option to pay the interest while you are in school, but you can also opt to begin paying later. If you choose not to pay the interest while you are in school, your interest will accumulate and be capitalized. In other words, your interest will be added to the principal amount of your loan.
Repayment is required to begin six months after the student drops below half-time status. For students who are not able to pay the minimum monthly amount, deferment options are available. Loan repayments are arranged with your loan servicer, which you can find at the National Student Loan Data System website.
Federal Direct Plus Loans
This is a federal unsubsidized loan that parents of dependent undergraduate students can use to help pay for education expenses. The Direct PLUS loan amount will depend on the student’s cost of attendance and the amount of financial aid they are already receiving. To be eligible for this loan, the student must be under 24 years of age, unmarried, and have no legal dependents. In addition, the parent must complete the PLUS Request Process at studentloans.gov, which will include a credit check. If a parent borrower is denied, the dependent student may be eligible for additional unsubsidized loans to help pay for his or her education if, and only if, the parent has been denied.
The interest rates for Federal student loans varies each year and is determined by the Federal Government. View the current interest rate and origination fee for Federal Direct PLUS Loans. The interest rate of the loan when you received it will be the interest rate for the life of that loan. Interest is charged during all periods.
Repayments for Direct PLUS Loans begin once the loan is fully disbursed. For deferment options and loan repayment arrangements, please contact your loan servicer. You may find your loan servicer at the National Student Loan Data System website.
