What Exactly Are Loans?

The transition from secondary school to college is hard enough because of how hectic your schedule might get without including all of the financial requirements. You have probably heard about the FAFSA, grants, and scholarships that are available but you may still be confused about the extra assistance that is available to you as a college student.

Loans are a tool that students have access to when they do not have enough provided funds for the school year. There are multiple types of loans that come with their own stipulations.


Direct Subsidized Loan

These are available to both undergraduate and graduate students.

The amount you receive is decided by the school you attend and cannot exceed your financial need.

The US. Department of Education will pay for the interest on the loan as long as you are in school at least half-time, for the first six months after schooling, and during a deferment of payments.


Direct Unsubsidized Loan

These loans are available to both undergraduate and graduate students.

They do not require proof of financial need.

The school you attend will decide the amount that can be borrowed based on the cost of attendance and if you receive any other aid.

You will be responsible for paying all of the interest that accrues on the Loans during all periods (interest starts growing the moment the loan is taken out).


Both of these are available at schools involved in the direct loan program as long as students are enrolled at least half-time in a program that leads to a degree or certificate. Direct Subsidized Loans are limited to a set amount of academic years and Direct Unsubsidized Loans have different set limits for the amount that can be taken out.

It is important to speak with the financial aid office whenever you decide to apply for a loan.

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