College is the final step in the educational process. Although college is very expensive, there are many different options available to assist you in affording the tuition. Most people apply for loans the most popular being a direct loan.
Most colleges offer student loans and financial assistance, however a direct loan is offered by the Department of education.
You can obtain an application by either calling the Department of Education or going online. Doing a Google search will bring you to their website.
You can apply for a direct loan in two different ways; subsidized and unsubsidized.
A subsidized direct loan means that the amount of credit you receive is based on the tuition you require.
As long as you are in school, you will not be required to make a payment and you will not be charged interest.
An unsubsidized direct loan means that there is a limit to the amount of money you can borrow. With an unsubsidized loan, the amount that you require is not taken into consideration.
There is considerable interest charged to both these types of credits that you will be responsible for paying.
Loan Amount Restrictions
The maximum amount for a subsidized loan varies depends on what year you are in college. An undergraduate can receive a maximum of $2,625, and the maximum you can receive on an unsubsidized loan is $4,000.
For the second year of college the maximum increases to $3,500 for a subsidized direct loan and $5,000 for an unsubsidized loan. For the remaining years that you are in college, a subsidized loan remains at $5,500. The limit for an unsubsidized direct loan does not increase for the remaining years.
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