Your Questions About Direct Loans

Nagesh answers:

I like federal direct loans b/c if you have a history of poor performance in school, they will give you the amount request. Instead, ffel will probate the loan to the cost of tuition and books and not for outside cost, like, housing and food. In addition, direct lenders charge an origination fee for their loans, so student may have to pay the difference. FFEL doesn’t have an origination fee, so the money you request is the amount you will receive. Unfortunately, a few school use direct loans because more schools are reaping the benefits of doing so. I am sure there will be a point where all schools are going to deal with FFEL lenders

Nagesh answers:

I have direct loans and I had to go through a similar process except my Direct Loans did not take that long. You can log on to the website yourself at www.dl.ed.gov to check your loan status instead of waiting for your school to tell you if the loan was granted or not.

My experience with Direct Loans and dealing with the University I was attending was a speedy process. If you sent in your tax information to your counselor and filled out the promissory note weather it was linked by your school’s website or the government website it still should not take long. You maybe waiting for an enrollment date to get into class and not waiting on Direct Loans.

You can always fill out Federal Student Aid to see if you qualify even if you don’t think you are eligible to receive it anyway and up to the current year or as far ahead as financial aid will give you to ask for financial assistance. Most students have to go through Direct Loans to pay for schooling now, I was approved for a loan through a private bank but Direct Loans mandated colleges that students must go through their services and no more banks loans to pay for school.

Call this number to see if your app. Was accepted Toll free: 1-800-848-0979 from www.dl.ed.gov

Nagesh answers:

If you have direct loans, I think your referring to government stafford loans and not private bank loans. There are three types of government stafford (direct loans), subsidized, unsubsidized, and plus loan. A Plus is taken out by your parents and since you said you have a six month grace period it’s not a plus loan (no grace period with plus).
With a subsidized loan, the government will pay the interest during school, grace period, deferments when the six month is over you’ll beginning paying the interest rate about 6 percent. With a unsubsidized loan, you accrue interest from the beginning on the loan.
You get a six month grace period following when you graduate or leave school. At the that time you make arrangements to begin payments which includes the accruing interest unless you a subsidized loan then no interest until you Begin making payments after the grace period.

Nagesh answers:

Direct loans have 6 different programs you can sign up for to pay them back. 2 are the best options for those of us not lucky enough to have a high paying job waiting for us upon graduation. They are income based repayment plans its very simply to sign up for and do it now to avoid any delays. You simply go to direct loans website I don’t have it off top of my head but you can ask your financial aid office for it. And you will find the information to sign up there. Its very simple you merely allow them to review your tax information each year and they only look at your income to set your payment amount. For me a family of 3 I won’t half to even make a payment until I am making about 40 k a year. You make payments based off your income until 25 years has passed and the remaining balance if any if forgiven. Look in to it I promise its worth it with today’s unstable economy.

Nagesh answers:

Loans have to be paid back. The government will pay your interest WHILE YOU ARE IN SCHOOL. After that, you will be paying the 4.5% interest rate while you’re in repayment (could take up to 30 years). If you have enough to get by without loans, I would recommend not taking them out. That $3500 could easily cost you twice that when you graduate unless you suddenly have a lot of cash to pay it off when you graduate.

And do you really need a car if you’re living in the dorms? I’d try a semester without one. Parking is often such a hassle at colleges that it’s not worth it.

Now, if you will have to take a loan out, the subsidized loans are the best kind you can get.