Federal Direct Subsidized Loan

Federal Direct Subsidized Student Loans are issued on an as-needed base. The federal government is responsible for paying all interest on the direct loan while the student is enrolled in school. The student must be enrolled in school no less than half-time and for the duration of the six-month grace period.

Who is Eligible for a Federal Direct Subsidized Loan?

To be eligible for a federal direct subsidized loan a student must meet the following requirements:

  • Meet requirements for federal financial aid as per the PELL grant. A PELL grant can be used to pay for tuition, books or commuting fees. PELL grants are open to students who have not received their first bachelor's degree or specialized certificate.
  • Students must demonstrate financial need for the loan. Financial need is established when your EFC, plus the loan amount, plus any other financial aid you are receiving, adds up to less than your cost of attendance.

Subsidized Loan Borrowing Limit

Upon eligibility, the government will pay, or subsidize, the interest on the loan while the student is enrolled in school, for the first six months after you leave school, and if you meet the criteria to have the loan deferred. Students may borrow government money (subsidized money) for an amount equal to the annual loan borrowing maximum for undergraduate or graduate study.

For more information on applying for a federal direct subsidized loan, visit www.studentaid.ed.gov.

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