A guaranteed student loan for undergraduates who are U.S. citizens or permanent residents and who have demonstrated financial need as determined by federal regulations. Show
Eligibility:
Interest rate: Fixed at 3.73% for loans first disbursed from July 1, 2021, through June 30, 2022 Loan fees: 1.057% origination fee for loans first disbursed from October 1, 2020, through September 30, 2023 Loan limits: The federal government sets limits on the amount in Direct Subsidized loans that a student may be eligible to receive in each academic year and in total. Limits vary based on the student's year in school, among other factors. For loan limits and further details, please see under "How much can I borrow?" on the Federal Student Aid webpage on Direct loans. Interest accrual: No interest is charged while a student is in school at least half-time and during deferment periods. Repayment: Six-month grace period; maximum 10 years. Application procedure: Upload the form using the Online Document Upload Tool, or fax it to Undergraduate Financial Aid using the information in the form's header. For security reasons, please do not submit financial aid documents via e-mail. New borrowers will be notified to complete the Direct Loan Master Promissory Note once Yale originates the loan with the Department of Education. They will also be notified to complete the Federal Loan Entrance Counseling Session required for all first-time borrowers. Subsidized student loans are among the least expensive student loans. The federal government pays the interest on subsidized student loans during the in-school and grace periods, as well as during authorized deferments. Borrowers are responsible for paying the interest on subsidized student loans after the loans enter repayment. Borrowers are also responsible for the interest that accrues during forbearances. The federal government pays the interest during deferments but not forbearances. Examples of Subsidized Student LoansSubsidized student loans include the subsidized Federal Stafford Loan, the Federal Perkins Loan and the portion of a federal consolidation loan that is attributable to a subsidized Federal Stafford Loan. Federal Perkins loans lose the subsidized interest benefit when consolidated. The Federal Perkins Loan program ended on September 30, 2017. The subsidized Federal Stafford Loan has been available only to undergraduate students since July 1, 2012. Graduate students are no longer able to borrow subsidized Federal Stafford Loans, but may borrow unsubsidized Federal Stafford Loans instead. About one fifth of all student loans are subsidized. Eligibility for Subsidized Student LoansEligibility for subsidized student loans is based on financial need. Recipients of a subsidized student loan must demonstrate financial need, which is the difference between the college’s cost of attendance and the student’s expected family contribution (EFC). The amount of subsidized student loans a student can receive is capped at the student’s financial need and the loan limits, whichever is lower. The loan limits for subsidized student loans are generally lower than the loan limits for unsubsidized student loans. Borrowers of subsidized student loans must be enrolled on at least a half-time basis in a degree or certificate program at a college or university that is eligible for federal student aid. Repayment begins at the end of the grace period after the student graduates or drops below half-time enrollment. The grace period is six months for subsidized Federal Stafford Loans and nine months for Federal Perkins Loans. To be eligible for subsidized student loans, the student must also satisfy the general eligibility requirements for federal student aid, including:
How to Apply for a Subsidized Student LoanTo apply for the subsidized Federal Stafford Loan, the student must file the Free Application for Federal Student Aid (FAFSA). The college financial aid office will send the student a financial aid award letter that will specify the amount of subsidized Federal Stafford Loan for which the student is eligible. The student must then complete entrance counseling at studentaid.gov and sign a Master Promissory Note (MPN). There may be a 30-day delay before the loan proceeds are disbursed, depending on the college, if the student is a first-time, first-year borrower. The loan proceeds are credited to the student’s account at the college. The funds are applied first to tuition, required fees and, if the student is living in college owned or operated housing, to room and board. The funds in the student account may also be applied to other college charges, with the student’s permission. If there is a credit balance remaining, the college will refund it to the student within 14 days to pay for other college costs. For more expert advice on borrowing student loans responsibly and managing student loan debt, sign up for our free newsletter. What is difference between subsidized and unsubsidized student loans?Subsidized Loans do not accrue interest while you are in school at least half-time or during deferment periods. Unsubsidized Loans are loans for both undergraduate and graduate students that are not based on financial need.
How do I know if my student loan is subsidized or unsubsidized?Subsidized: Interest is paid by the Education Department while you're enrolled at least half time in college. Unsubsidized: Interest begins accruing as soon as the loan is disbursed, including while students are enrolled in school. Subsidized: No payments are due in the first six months after you leave school.
What is better subsidized or unsubsidized loans?When it comes to subsidized and unsubsidized loans, subsidized loans are the clear winner. If you can qualify for them, you'll pay less money in interest charges with a subsidized loan, and you'll save money over the life of your loan. But not everyone will qualify for a subsidized loan.
What is the benefit of a subsidized student loan?Students with demonstrated financial need who receive a subsidized federal student loan do not pay interest as long as they are enrolled in school on at least a half-time basis. In these cases, the government pays the interest on behalf of the student.
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Who is eligible for subsidized student loans
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