By completing the FAFSA, you will be considered for the Federal Stafford Loan program. Direct Loans are funded by the U.S. Department of Education through your college and are managed by a loan servicer. 

There are two types of Federal Stafford Loans: Direct Subsidized Loans and Direct Unsubsidized Loans. Find the details about both programs to make an informed decision about funding your college education.  Approximately 15% of eligible students accept and receive loans.

Direct Subsidized Loans

Your eligibility for the Direct Subsidized Loan is based on your financial need and your undergraduate academic level. Repayment is deferred until six months after you graduate or cease to be enrolled at least half-time. The government pays the interest while you are enrolled in school. Direct Subsidized Loan maximums vary according to academic level and dependency status. In addition, there are lifetime loan limits.

Direct Unsubsidized Loans

Your eligibility for the Direct Unsubsidized Loan is not based on financial need. You may borrow the cost of education minus all other financial aid you receive, up to the Direct Loan maximum for your academic level. Interest on Direct Unsubsidized Loan begins to accrue from the date of disbursement.

You have two choices for paying interest

  1. You may pay it while you are enrolled full-time through your Federal Loan Servicer
  2. The interest can accrue and become part of the principal that you will owe. You begin making payments through your Federal Loan Servicer six months after you graduate or cease to be enrolled at least half time.

Additional Sources of Information: