Direct Unsubsidized Loan

Federal Direct unsubsidized loans benefits are much higher, low interest rates, flexible repayment and forgiveness are its key aspects serving both undergraduate students and graduate students. This blog will help you guide more on this topic.

Updated by Navya B on 22nd June 2018

Direct Unsubsidized Loans

  • Direct unsubsidized loans are the financial aid provided to the students, by providing loans to the students.

  • Direct Unsubsidized loans are also called Stafford Loans sometimes.

  • Unsubsidized loans are doesn’t have any condition, all the students can apply for the loans, there is no need for the demonstration of the financial need for loans.

  • These loans are provided by the federal government.

  • Unsubsidized loans are provided to both undergraduate students and graduate students.

  • To seek loans, a rate of interests for undergraduate students is 4.45%.

  • For graduate students the rate of interest 6%.

  • Direct Unsubsidized loans should be applied through FAFSA application process.


Loan limits for Unsubsidized Loans

Direct Unsubsidized loans are subjected to limits like

  • Annual limits-This is the annual average of loans that are supposed to be taken. There is a limit on the amount of money or the number of loans that have to be taken per academic year.

  • Aggregate limits-Aggregate limits refer to how much can you borrow for that particular program.

  • On every year of July 1st, the fee structure is revised or structured.

  • The fee structure is mentioned below:

Type of loan

Formula of interest rate

Interest rate cap

Current Intrest rate (2017-2018)

Undergraduate loans

10 years treasury+ 2.05%

8.25%

4.45%

Graduate loans

10 years treasury+ 3.6%

9.50%

6.00%


The list of Colleges which provide Direct Unsubsidized loans

Direct Loans are usually provided by the federal government and few of the colleges which participate in unsubsidized loans are:

John Brown University

Arizona State University

Baker University

University of Saint Mary

Grantham University

Duke University

Howard University

Liberty University


 Eligibility for Direct Unsubsidized loans

  • A student should be a citizen of US or an eligible non-resident of United States.

  • A candidate should have received a high school diploma or equivalent degree.

  • The degree the student has enrolled should be at least half-time or full it should be full time.

  • A student should not have pending debits of the older federal loans or federal aids.

  • A candidate who wills to apply for a direct unsubsidized loan should also be eligible for FAFSA process.


How to apply?

  • Download the FAFSA application form.

  • Fill the FAFSA or renewal of the previous FAFSA.

  • Submit the application form before the deadline.

  • The award letter will be either mailed to you or sent to your college, you can collect it from the office.

  • Keep in touch with the financial aid officials and complete the paperwork in any. To know more about FAFSA application go here.


How is the loan award distributed?

Loans in universities and colleges are basically to fulfill all the educational needs of a student. But the question arises which are the needs that have to be given more importance.

Another main thing is that a student’s loan can be evaluated on the basis of the cost of attendance.

The major needs on what the award money is supposed to be distributed are:

  • Tuition and Fees

  • Books

  • Accommodation

  • Transportation

  • Other personal expenses


Conclusion

I hope this article helped you know about Direct Unsubsidized loans. There are no strict eligibility requirements for direct unsubsidized loans.

It is very beneficial for the students and unsubsidized loans will give a good number of students to win the chance to avail loans.


FAQ'S

  1) What should I do if I believe that my loan data is incorrect?


In this case, you should contact your local service provider. Even then, if there is a problem then you can contact the US Department of Education.

  2) How is the interest rate on my federal student loan determined?


The interest rate on all the loans is set by the Federal law and it varies according to different loans. Whatever changes that happen to the interest rate it is decided by the Federal Government.

  3) Whom do I contact if the wrong school is listed on my loan?


For the Federal Direct Loan Program, you should contact your loan servicer or loan holder. In the case of Federal, Perkins Loan Program contact the U.S. Department of Education's Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800-433-3243).

  4) What should I do after I take an Unsubsidized loan?


After taking an unsubsidized loan you should consider making interest payments right away, otherwise, it will pile up and it would be difficult to keep on paying that much huge amount.

  5) If I have the option of both Subsidized and Unsubsidized loan which one should I accept?


You should borrow only what you need and you should accept the subsidized loan first because it has more benefits.