Your Questions About Direct Loans

Lisa asks…

Direct Loan Subsidized?

So I’m receiving Finical Aid – a Pell Grant and offered a Direct Loan Subsidized. So I’m guessing the Pell grant is for books transportation and whatnot and it’s suppose to cover the cost of classes.

If I accept the loan ( I already completed everything I need for it as I was doing FASA and it’s just offered on the table) does it first go to pay for tuition/fees or does I get it?
I don’t want to take out the Loan if it’s first priority is to pay classes when the Pell Grant covers that. Like moving the responsibility of me paying for tuition instead of extra money to cover other expenses.

Nagesh answers:

A college will usually have 2 disbursement dates, which are usually before each semester where the grants and loans for that semester are disbursed into all the students college accounts. My daughter’s college disbursement dates are listed on her college account site or you can ask your FA office. The grants and loans get deposited into your college account. The college will first deduct their charges for tuition, meal plan, fees and housing and the rest will be refunded to you by check or card system depending on how your college does it for books, materials etc. My daughter started last year september 1, her first disbursement date was 8/25 when she got half her loans and grants and she got her refund on card a week after school started.

Donna asks…

Direct Subsidized Loan?

If throughout 4 years in the university I take out this subsidized loan that is given to me ( one with no interest). After I graduate can i come and pay the full amount i owe for this loan right away? ( example: 15,000 with no interest taken) or is there something i should know?

Thank You. -Ruslan

Nagesh answers:

As long as you pay it before the grace period is up, yes it should just be for the amount. You will have to call them though to make sure you send them the right amount to pay it off. Paying off the loan is always more of a process than any other payments.

Susan asks…

federal direct plus loan APPROVED?

My parents made and application for the plus loan.. and once they submitted it was approved. but i dont have anything else to prove it was approved ? i dont know has anyone done this application and did it say on the screen “approved” or did it come out right away “denied” Im confused. I dont want to tell my school i want to use that loan until im sure it was really approved.

Nagesh answers:

Direct PLUS Loans are very easy to qualify for. They go off of your parents’ credit history. If the application said approved, then you are really approved for it. Talk to your school’s financial aid office – different schools have different processes for you to follow from this point on. Some schools have an internal form that you need to fill out to actually request the funds. Also, if your parents haven’t filled out a Master Promissory Note yet, they will want to do so at www.studentloans.gov.

Hope this helps!

Nancy asks…

Federal Direct PLUS loan?

how can I find out the max. loan that I can request? I cant find it on the site.
Nora – max. = maximum. please know that sometimes, people like to abbreviate things..

anyway, thanks so much FinancialAidGuy.

Nagesh answers:

First, ignore the ignorant person who thinks you put a period in the wrong place when you were actually just abbreviating.

There is no maximum for the PLUS loan in a dollar amount sense. However, the loan can not be more than the actual cost of attending. For example, if you are going to a local community college and it costs $3000 a year to attend there full time, you can not take out a $5000 loan.

David asks…

Could someone please explain these loans?

Could someone please explain the difference between Stafford Loans, Federal Direct Loans and Unsub. Federal Direct loans. I am trying to take out student loans for my dream school and I am really confused. Thanks!

Nagesh answers:

Direct Loans is a Stafford Loan provider.

A Stafford Loan is the one you get from the federal government. It is not a credit based loan, so in essence, once you complete the FAFSA and apply for a Stafford, you should get it. The only reason you wouldn’t get it is if you are a convicted sex offender or are in default on previous student loans or if you owe any previous school grant monies.

A subsidized student loan is a loan that does not require you to pay interest while you are enrolled in school. During that time, the federal government pays the interest. But after you graduate and your grace period ends, you must start paying back your loans and interest.

An unsubsidized student loan is a loan that requires you to pay back the interest on the loan while you are in school. Like a subsidized student loan, payment on your principal is deferred until six months after graduation, but instead of the school or government picking up the tab on interest, it is all up to you.

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