- Paying for College
- Student Loans
- Should You Accept All the Federal Student Loans You’re Offered?
If you filled out a Free Application for Federal Student Aid (FAFSA), you should receive financial aid award letters from each school you’ve been accepted to by April.
These offers for federal student aid could include grants, scholarships, work-study and federal student loans. After reviewing your award letter, you ount of federal student loans I’m offered? Before you can answer that question, here’s what you need to consider.
Learn More About Your Federal Student Loans
In terms of loans available for you to borrow under your name, there are two main types: Direct Unsubsidized Loans and Direct Subsidized Loans . Both of these loans have fixed interest rates , charge origination fees and offer in-school deferment. Origination fees are deducted from each loan disbursement, so you’ll ultimately receive less than you borrow. There are also loan limits that range from $5,500 to $12,500, depending on your year in school and dependency status . You can choose to defer payments while enrolled in school at least half-time and there is a six-month grace period.
- Direct Unsubsidized Loans are not based on financial need. With an unsubsidized loan, you are responsible for paying the interest that accrues while you’re in school.
- Direct Subsidized Loans are based on financial need, which is determined by your family’s income and other factors reported through the FAFSA. The government pays the interest that accrues while you’re in school and during your grace period, which helps reduce the total amount you have to pay back.
Federal student loans typically have lower fixed interest rates than other types of fixed rate loans, and there is more flexibility with paying them back due to multiple repayment options, according to Frances Kweller of Kweller Prep . Repayment plans range from 10 to 25 years , and there are income-driven plans exclusive to federal student loans. Læs videre “Should You Accept All the Federal Student Loans Youre Offered?”