Home Tip of the Day Paying for School: Your 3 Direct Loan Options

Paying for School: Your 3 Direct Loan Options

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One of the most important parts of the enrollment process is figuring out your finances for school. Do you plan on paying out of pocket, applying for financial aid, or getting a loan? If you know the answer is a loan, then it’s a great idea to be educated on the types of direct loans available, and what you qualify for.

Understanding how the payment deferments work, as well as what the grace period is with the loan. The grace period is an allotted amount of time during which you are not expected to make payments on your student loans after leaving school, or dropping below half-time status.

What are the different direct loan types?

Direct Subsidized Loans: Great for half-time students with financial need.

  • No interest is charged while you are in school at least half-time, during your grace period, and during deferment periods.
  • You do not have to make payments while you are attending school at least half-time and during your grace periods.
  • You will receive a six month grace period to make payments after you drop below half-time.

Direct Unsubsidized Loans: Good for half-time students not based on financial need. 

  • Interest is charged during all periods.
  • You do not have to make payments while you are attending school as a half-time student, or during your grace period.
  • Interest will continue to be charged while you’re in school.
  • You will receive a six month grace period after you drop below half-time.

Direct PLUS Loans: Ideal for parents of dependent undergraduate students who are enrolled at least half-time.

  • You can borrow up to the school’s cost of attendance.
  • Interest is charged during all periods.
  • Direct PLUS Loans do not have a grace period. The repayment begins as soon as the loan is fully disbursed.
  • To qualify for this loan you must not have an adverse credit history. A credit check will be required.

Once you know what method best suits you then talk to your financial aid about next steps and starting classes.

By Online Learning Tips Staff

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