What is a Subsidized Direct Student Loan?
This is one of the largest educational student loan programs; the formal title of the program is the William D. Ford Federal Direct Stafford Loan. The U. S. Treasury provides the funds. These are insured by the federal government and have replaced the Federal Stafford Student Loan.
In order for the federal government to pay the interest on your subsidized direct student loan while you are in school, you must have financial need. However, you do not have to have financial need to get a student loan. Students without financial need may borrow an Unsubsidized Direct Student Loan. The borrower, not the federal government, is responsible for paying the interest on this student loan; however, the program allows borrowers to defer the interest payment until the borrower is no longer enrolled on at least a half time basis.
To be eligible you must be formally admitted to a college that participates in this program and be attending at least half time and cannot have defaulted on a previous federal student loan.
When you have completed the online counseling, be sure to print two copies of the “Rights & Responsibilities” page. One copy is for your files and one copy is to be turned in to Financial Aid & Scholarships (FAS) either in person or via facsimile to (702) 895-1353. If this form is not turned in to FAS your “Direct Student Loan” funds will not be released!
The annual maximum cannot exceed the grade level limits stated here OR your cost of attendance minus any financial aid, whichever is less. First year undergraduates may borrow $2625, second year students may borrow $3500 and students who have completed two years may borrow $5500 per year. The maximum amount you can borrow for your undergraduate program is $23,000. Graduate students may borrow up to $8500 per year with a maximum total of $65,500 including amounts borrowed as an undergraduate. These amounts are effective for student loans for which the first disbursement was made on or after 10/1/93.
If you have, a Stafford Student Loan that was first disbursed on or after July 1, 1994, the interest rate could change each year of repayment, but it will never exceed 8.25 percent. The interest rate is adjusted each year on July 1. You will be notified of interest rate changes throughout the life of you direct student loan. If you had a loan prior to July 1, 1994, the interest rates might be different; check with the lender or agency that holds your student loan.
There are fees to obtaining a Subsidized/Unsubsidized Direct Student Loan. You will be charged fees of up to 3%, deducted proportionately from each disbursement of your student loan.
Repayment begins after you graduate, leave school or drop below half time enrollment. Depending on when you first received a direct student loan, your first payment would be due in six to twelve months. Of course, you can make payments while in school, if you wish. This will reduce the over all amount to be repaid and the overall interest costs.
