Direct Student Loan - This is where money aid comes in handy. There are several kinds of money aid. There are scholarships that come back from your college directly or from personal voters in your community. you'll get scholarships for sports, for bound categories you took in highschool, or as a result of a parent served in a very war for our country. this is often undoubtedly one thing you must consider if you're progressing to faculty soon, or maybe if you're already in faculty. Check your money aid workplace for a lot of info.
Other varieties of money aid embrace Federal and state grants. Again, for this info, please contact your college's money aid workplace.
Many people cannot afford college tuition and fees on grants and scholarships alone. They need student loans. There are different types of loans and you should be aware of all of them. Direct student loans are primarily Federal student loans and other loans through the school. With these types of loans, you borrow directly from the federal government and repay through them, even if you have more than one direct student loan. They offer great repayment options at low interest rates.
Below, you will find information on some of the direct student loans available.
Federal Direct Student Loan
This type of loan is a government loan that gives low-interest loans. The lender of these loans is the U.S. Department of Education. You can contact your college's financial aid office in order to receive these loans.
Direct Stafford Loans
This type of direct student loan is for people who can prove they need assistance paying for college. This loan is given through the FAFSA (Free Application For Federal Student Aid) form. It is granted by the U.S. government and are available for undergraduate and graduate students both. In order to use this loan, you need to fill out the FAFSA form--this can be found online or your schools' financial aid office.
Benefits of a Direct Stafford Loan
The biggest benefit of this type of loan is the fact that it is a fixed rate and it includes low interest. The amount you are required to pay each month will not increase due to economy. As long as you make minimum payments on time based on the stipulations of your loan, the interest rate will stay the same. This is a big benefit because with other types of loans, you are given a specific rate plus Prime. This means you are paying back a certain amount, plus whatever the prime annual percentage rate (APR) is currently. The prime rate fluctuates and can raise your minimum payment.
There are two different types of Stafford loan: subsidized and unsubsidized.
Direct Subsidized Undergraduate Stafford Loan
These usually have a lower interest rate than unsubsidized. New loans are currently around 4.5% fixed for this school year. The interest does not accrue while you are still attending school, and there is a grace period after you finish school so you can have a fighting chance of finding work in your new field. Interest does not start to build up until 6 months after you finish school.
Direct Unsubsidized Stafford Loan
These typically have a higher interest rate than the subsidized loans. They are currently at 6.8% fixed. The interest does accrue while you are in school and after you graduate. There is no grace period at all for this loan type. The moment the loan goes through and you receive the money, you start owing interest.
You can choose either of these types of loans, but the best one is the Subsidized loan. However, sometimes people are not eligible for that loan because of low credit scores or other reasons.
Perkins Loans
These loans are available for graduate and undergraduate students. They have a slightly higher interest rate than Stafford loans and they are only given to the people who are in the highest need possible for financial assistance. They are federally funded like a Stafford loan. The biggest difference with the Perkins loan and other direct student loans is Perkins loans have other lenders than the federal government and come directly from your college. You typically get $4,000 ($8,000 for graduate students) broken up into two equal payments each semester. Remember, not everyone is qualified for this loan; however, it is a good idea to check because you do not know until you try.
Direct PLUS Loan
This is a loan option that is also through the federal government. It does carry a higher interest rate than the Stafford and Perkins loan, but this loan covers up to the student's full cost of attendance, minus other aid. They take all scholarships and other loans you have received and give you a loan to cover the rest. This type of loan does require a credit check in order to be approved, where the other loans do not.
There are two types of PLUS loans: a Parent PLUS loan and a Direct Graduate PLUS loan. The parent PLUS is only offered to the parents of undergrad students. A student cannot receive this loan by him or herself. The Direct Graduate PLUS loan is offered to graduate students trying to attain an advanced degree. However, this one is offered to the students directly.
These types of loans start accruing interest the moment the money is received and they do have a slightly higher fixed rate at 7.8%. With this type of loan, you are allowed to postpone payments for up to six months after graduation.
Please keep in mind that not every school can participate in the Direct Loan Program. If your school does not offer these types of loans, they will offer something similar if possible.
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