Direct Subsidized Loan

Direct Subsidized loans are mainly for students who demonstrate financial need in order to gain loans.

Posted by Navya B on 23rd March 2018

Direct Subsidized Loan

  • Direct Subsidized Loans are the Financial Aid provided to students by the federal government.

  • The rate of interest for these subsidized loans is lower compared to other student loans.

  • Direct Subsidized Loans are only given to students who exhibit their financial need.

  • One should produce documents for income tax and any other documents.

  • Direct loans are for undergraduate students, and the loan should be paid back after graduation.

  • The interest rate for the year 2017-2018 is 4.45% for the whole academic year.

  • Any student who wills to seek Direct Subsidized Loans has to apply for FAFSA (Free Application for Student Aid).


Difference between Direct Subsidized Loans and Direct Un-Subsidized Loans

With the name itself one can figure out both the loans are direct loans, they are provided by the federal government. The government provides loans to students with low-interest rates.

Now what you have to know is what subsidized and Un-Subsidized loans? Well, it’s simple, Subsidized loans have special criteria to provide loans. They only issue loans to students who are economically weak and seek financial aid.

Un Subsidized Loans are completely different, they are provided to almost all the students who apply for loans. There is no need to demonstrate financial status and need for financial help.


Eligibility criteria for Direct Subsidized Loans

  • A Student who is willing to apply for subsidized loans should be a citizen of the United States.

  • You should have completed Higher Secondary education.

  • A candidate should have been enrolled in any undergraduate program of any stream.

  • The program enrolled should be at least Half-time basis.

  • You should have minimum score throughout the academics.

  • Students should produce documents providing the need for financial aid.

  • A student should have cleared all the previous loan debts.

  • Beyond these entire requirements, one should fulfill the requirements for FAFSA.


How to apply?

As Direct subsidized loans for a part of FAFSA, you need to complete the procedures of the FAFSA application form.

To know more about “How to fill FAFSA application?” read our other blogs.

The steps for application are as follows:

  • Download the application form from the respective website.

  • Check with your eligibility, if you can apply for the direct subsidized loan.

  • Fill the application form with all the necessary details.

  • Attach/upload documents if necessary.

  • Produce the financial need demonstration to apply for the loan.

  • Submit the application before the last date.

  • Keep a track of your application continuously.


List of colleges which provide Direct Subsidized Loans

Capella University

Walden University

John Brown University

Arizona State University

Baker University

University of Saint Mary

Grantham University

Duke University

Howard University

Liberty University


How does it benefit students?

  • It helps students reduce a burden on financial issues.

  • Students get free books and other necessary resources for education.

  • Students can concentrate more on academics.

  • You can get consolidated loans in some conditions.

  • Students sometimes can also achieve loan forgiveness.


Conclusion

The main purpose of this was to put some light on the most read topic, direct subsidized loan. Subsidized loans help students in a major part for their educational purposes.

I hope this blog made you understand what are the exact eligibilities and requirements to apply for a loan and what the procedure to do so is.


FAQ

  1) From when do you have to start paying back your student loan?


You don't have to begin repaying the most federal student loan during your college you have to start paying once you have left the college.

  2) What is the Master Promissory Note (MPN)?


MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s).

  3) What is student deferment?


A deferment or forbearance allows you to temporarily stop making your federal student loan payments or to temporarily reduce the amount you pay.

  4) What is the difference between a loan and a grant?


Grants are the money that you don't have to repay and it is based on your financial need on the other hand loans are the money that you borrow and you have to pay it back usually with interest.

  5) Can I cancel a loan if I decide that I don't need it or if I need less than the amount offered?


Yes. Before your loan money is disbursed, you may cancel all or part of your loan at any time by notifying your school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames.

  6) Am I eligible for a Direct Subsidized Loan or a Direct Unsubsidized Loan?


To be eligible for any of the loans you must have applied for FAFSA, and you must be enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, you must also be enrolled in a program that leads to a degree or certificate awarded by the school.