Direct Subsidized Loan
A Direct Subsidized Loan is a type of federal student loan for undergraduate students with financial need, where the U.S. Department of Education pays the interest while the student is in school at least half-time, during the grace period, and during deferment periods. This loan helps reduce the overall cost of borrowing by covering interest payments during these times, allowing students to focus on their studies without accruing debt. The amount of loan eligibility is determined by the student's school based on financial need. It is a popular choice due to its favorable terms compared to some other loan options.
Common Questions
What requirements must I meet to qualify for a Direct Subsidized Loan?
To qualify for a Direct Subsidized Loan, you need to demonstrate financial need and be an undergraduate student enrolled at least half-time in an eligible program at a participating school.
How is the interest on Direct Subsidized Loans different from other loans?
Unlike many other loans, the U.S. Department of Education pays the interest on Direct Subsidized Loans while you are in school at least half-time, during the grace period, and during deferment periods, reducing the total cost of borrowing.
What is the maximum amount I can borrow with a Direct Subsidized Loan?
The maximum amount varies depending on your year in school and your dependency status, with annual limits ranging from $3,500 to $5,500 for undergraduate students.