Federal Direct Student Loans – Loans Offered & Overview

August 29, 2011

Federal Direct Student Loans

Federal direct student loans are offered through the government as a way for you to get the money you need when it comes to affording college. Knowing that those straight out of highschool or wanting to go back to school don’t exactly have the funds needed to attain a degree, The Federal Direct Student Loan Porgram (FDSLP) was designed as a way to provide low interest loans as well as many other benefits that cater to being a student usually without a job.

These federal direct student loans are offered in two categories, one being subsidized loans and the other being unsubsidized and are offered by the Stafford Student Loan program. These two options are discussed in much further detail in the next section.

Federal Direct Student Loans

Federal Direct Student Loans – Major Overview

Subsidized Federal Directs Student Loans

  • These loans are designated for those who need it most, also known as an as needed basis. These loans are given upon proof that are low income or live in a household that is low income among other speficications and these federal direct student loans allow you to not have to worry about paying interest while you are in school as the government pays you interest payments until you are finished with enrollment. With subsidized federal direct student loans, you can borrow anywhere from 2,365 to 10,000 dollars depending on where you are at in your schooling,

Unsubsidized Federal Student Loans

  • These loans are offered to anyone, unlike subsidized student loans, you don’t have to prove your need. This option charges you with interest from day one, and you can either choose pay your interest each month, or allow it to accumulate and pay it off later, although this isn’t suggested as if you do, you will pay much more then you would if you paid it off each month while you were in school. These federal direct student loans allow you to borrow anywhere from 4,000 to 10,000 per year depending on what level of education you are entering. These loans have an 4 percent activation fee meaning you pay 4 percent of your loan amount when service starts.

Federal Direct Student Loans – More Details

  • You receive a 6 month grace period with each of the federal direct student loan options above, meaning that you do not have to pay monthly payments on your debt for the first 6 months out of college. This rule also applies to dropping out or dropping below the level of half time enrollment.
  • Interest rates are found to be around 3 to 9 percent and are fixed meaning they stay the same for the entirety of your loan repayment.
  • There is no penalty for early repayment.
  • Federal direct student loans repayment plans are set at 10 to 30 years depending on which plan you choose to go with.
  • They have student loan deferrment options that can be used in the following categories; education, unemployment, economic hardship, forbearance, disability and default.

If you are intersted in using fedreal direct student loans for tuition fees, the best thing to do now would be to fill out a Free Application of Student Aid online which will show you which federal direct student loans your are eligible for.



Category: Federal Student Loans

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