The Federal Government has many schemes and options for helping the high school goers. The government supports eligible students with financial aid for their post-secondary degree programs from accredited educational institutions. The Direct Student loan is a financial aid for promising candidates with many dreams and goals. The Direct loan is also known as the William D. Ford Federal Direct Loan Program. It is a blend of common programs like the Stafford Loan, Perkins Loan and PLUS Scheme.
Different Types of Direct Loans
The Stafford Loan plays an integral role in direct student aid. It is categorized into two different schemes, namely subsidized direct Stafford loan and unsubsidized direct Stafford loan. You should show strong signs of financial needs to qualify for these programs. To obtain the Direct Stafford Loan, you must apply for Free Application for Federal Student Aid. The FAFSA application will state if you are eligible for the monetary option or not. The amount devoured by Direct Student Loans will depend on your financial status and GPA.
Choosing the Right Rate of Interest
Most people are interested in the Direct Student Subsidized Loan and Direct Student Unsubsidized Loan for their rates of interest. Both these loans have a significant difference in the interest rates. The interest rates are determined by the US Department of Education itself.
- The Federal Government reimburses the interest of subsidized loans when you are in college.
- For direct unsubsidized student loans you are responsible for paying the interests .
However, you can let the interest accumulate and capitalize on your overall loan amount. This will increase the total loan amount you should reimburse during the loan repayment period.
The Right Loan Duration
Moving on, the Direct Student Loan should be repaid within 10 or 25 years. The loan duration will depend on the scheme you choose. Thus, you must read through the lender’s terms and conditions before choosing a Direct Loan from the US Department of Education.
Signing the Promissory Note
To obtain a Direct Loan from the legit organization, you should sign a promissory note. Experts consider this note as a contract, where you agree to reimburse the student loan on time. You should have a valid PIN Number to complete the FAFSA application. Using the PIN number you can start a loan account and apply for a promissory note.
Here is a quick overview on how to sign-up for a direct student aid promissory note:
- Initially, you must open studentloans.gov. This is an official website for student loans.
- Use your PIN number, Date of Birth, SSN number and the last two letters of your name in the FAFSA Application.
- Now select Sign Master Promissory Note and read through its conditions. If you agree to the lender’s terms and conditions, you must select the agree option. This is treated as your signature.
- Finally print the Promissory Note and file it to your records.
A brief Outline
Applying for Direct Student Aid is a process with many steps. As a potential borrower, you must learn about the loan exhaustively for a safer and effortless loan application experience.