Michael asks…
What is Federal Subsidized & Unsubsidized Direct Loan?
Hey there. Can anyone help me understand what is Federal Subsidized Direct Loan & Federal Unsubsidized Direct Loan? Thanks in advance! It’ll be a great help. Appreciate it much. ^_^! Take Care.
Nagesh answers:
A Subisdized loan is a student loan you get through your schools finanical aid office and the interest is “subsidized” (paid for) by the federal government while you a student. The unsub is the exact same thing, but the interest is not paid by the government (you pay it). So, of the two, the subsidized loan is the better deal. Both are fixed rate, low interest loans that you don’t have to have a cosigner to get.
There is a table in this book with all the different student loan types and amount max and interest rates. Check it out;
http://www.edpubs.gov/document/EN0913P.pdf
Susan asks…
question about direct student loans?
last term was my first year with student loans. Well my very first term was a summer class and I failed it because it was so hard. I still got financial aid for fall term though and got all A’s that term. Now this term I think I am going to fail a class. I have been trying to do good but its a hard accounting class. I am passing my other class though. I think I might be put on probation for the first time though for fall 2012. Can I still qualify for the direct loan if I dont pass 6 credits this term? Im really trying but I know I am not going to pass the accounting class.
Nagesh answers:
As long as your GPA stays at least 2.0 or above you should be fine. You GPA must be 2.0 for ALL types of financial assistance including direct Stafford loans. However in order to qualify for a Stafford direct loan you must go half time [6 credits]…..It doesn’t matter how many you took prior BUT you must take at least 6 credits during the semester you are requesting the loan.
Mandy asks…
Direct Subsidized Loan?
So I understand this type of loan means the government pays interest while I’m in school.
My question is 1. How long does this last? Until I finish school? 2. There are no fees involved assuming I pay the full amount correct? How long do I have to pay the full amount?
Thank you.
Nagesh answers:
On a subsidized loan, the government pays the interest while you’re in school at least half time and for six months after.
If you pay the full amount before the six month grace period is up, then you don’t pay interest. If you don’t pay it off before the grace period is up, then they’ll typically set up a 10 year repayment plan.
William asks…
Federal Direct Plus Loans?
My financial aid account says that I have the Federal Direct Plus Loans, however when i click on the link it says this, “Your loan application was certified and submitted to the direct loan servicer” does this mean my mothers credit was approved and we have the loan?
Nagesh answers:
I’m not 100% sure, but I think that you are correct. If I were you, I would call my loan officer to confirm. Good luck in school!
Ruth asks…
Difference between the student PLUS loan and a federal direct subsidized loan?
Hi,
Im starting school in the fall and I checked my financial aid status, I am allowed to receive 2 types of loans: 1) fed direct loan subsidized 1, and 2.) a fed direct PLUS loan. What is the difference between the two? when do I have to pay them back? I dont want my mom to use her credit, and since I know PLUS loans are for parents, it is my idea, not hers to take it out, so can i use my credit instead? what is the interest on each of them?…..Should I just decide to take out a credit union student loan ( I am considering the usc credit union loan), instead of two different loans, in order to just have one balance? the usc credit union collegiate loan is available to all students regardless of where they attend right? I mean, besides having your credit approved first. has anyone taken out a student loan from this credit union? any info is greatly appreciated.
Nagesh answers:
With the Stafford subsidized loan the interest rate for the 08-09 academic year is 6.0% however the federal government will pay the interest for this loan as long as you are in school above half-time. Repayment on this loan will not begin until you leave school or drop below half-time. There is no penalty if you decide to pay off this loan early.
The PLUS loan is a parent loan that is credit based. If your parent decided to apply for the PLUS loan and is denied then you would be eligible for an additional Stafford unsubsidized loan in your name. The interest for this loan is 6.8% and starts acruing immediately. You can either choose to defer the interest payments until you begin to repay your loan or you can make interest-only payments while you are in school to keep the loan total down. There is also no penalty if you decide to pay this loan off early.
If your parent is approved and decided to take out the PLUS loan the interest rate is 8.5%. A new federal regulation starting with the 08-09 academic year is going to allow parents to defer their PLUS loan payments until after the student leaves school or drops below half-time. Even if they defer the principal payment though the interest will keep acruing.
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