The Federal Direct Student Loan program provides opportunities for students to obtain a loan, usually with lower interest rates and more flexible repayment options than loans from banks or other private sources, to assist in educational costs. These are loans so any money received must be repaid with interest. Direct Student Loans are either subsidized or unsubsidized:
- Subsidized Direct Student Loans are awarded based on financial need. A student receiving a subsidized loan will not be charged interest while in attendance with a minimum half-time status.
- Unsubsidized Direct Student Loans are not awarded based on need. A student will be charged interest from the time the loan is disbursed until it is paid in full. Click here for the current interest rates on student loans https://studentaid.gov/understand-aid/types/loans/interest-rates
A student must meet all general eligibility requirements. The amount the student may borrow depends on his or her grade level, college cost, EFC, current loan indebtedness, and other financial aid received. A dependent student's creditworthy parents may apply for a Direct PLUS loan for the amount of the student's college cost minus other aid received. A student may be denied a loan based upon his or her current student loan indebtedness.
