It's a loan funded by the federal government, and is included as a part of financial aid because of its low, fixed interest rate and favorable repayment options. The Direct Loan comes in two formats: Subsidized and Unsubsidized. What's the difference between the two? Read on. And know that you don't need to borrow the full amount of student loans that you receive. You can request that your financial aid office reduce your loan amount anytime.
Read more on how we are here to help you. Log in. College Savings Plans U. Plan Prepaid Tuition Program U. The federal government will pay or subsidize the interest on the loan while you are enrolled on at least a half-time basis.
In most cases, you must begin repaying the loan six months after you leave school or drop below half-time status. Typically, you have up to 10 years to complete repayment.
The amount of your payment depends on the size of your debt. Under certain conditions you may defer postpone payments for up to three years.
Ask your financial aid administrator or read your promissory note to obtain information about deferring payment. Direct Unsubsidized Stafford Loans For students without demonstrated financial need, an unsubsidized Federal Stafford Loan is available.
The interest rate on Direct Unsubsidized Loans is fixed at 6. A fee of 1 percent is deducted from each disbursement. Borrowers of the Unsubsidized Stafford Loan are required to pay interest on the loan while in school. You may make monthly or quarterly interest payments to your lender -- or you may choose to have your interest added to the principal of the loan.
This is called "capitalization. The grace period -- the time before beginning repayment. Periods of authorized deferment -- postponement. Periods of forbearance -- authorized delay in loan principal payment. Four repayment plans are available to borrowers with either subsidized or unsubsidized loans:. The Income Contingent Repayment Plan bases the monthly repayment amount on annual income, family size and the loan amount.
The Income-Based Repayment Plan bases payments on total federal loan payments as a percentage of income. The Extended Repayment Plan allows the borrower to extend repayment over a period of 12 to 30 years, depending on the loan amount. Under the Graduated Repayment Plan, payments are lower at the beginning of the repayment period and then increase every two years over 12 to 30 years.
For more information, call or visit www. The maximum amount you can borrow each academic year depends on your grade level and dependency status. See the chart below for annual and aggregate lifetime borrowing limits. You may not be eligible to borrow the full annual loan amount because of your expected family contribution or the amount of other financial aid you are receiving.
To see examples of how your Subsidized or Unsubsidized award amount will be determined. If you are a first-time borrower on or after July 1, , there is a limit on the maximum period of time measured in academic years that you can receive Direct Subsidized Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than percent of the published length of your program. Alberta Gator is a first year dependent undergraduate student.
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