8 Reasons Why You Should Take Out The Federal Direct Student Loans - Fafsa Student loans
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In this video, we discuss the 8 Reasons Why You Should Take Out The Federal Direct Student Loans - Fafsa Student loans. A federal Direct Loan is a federal student loan made directly by the U.S. Department of Education. Generally, if you took out a federal student loan or consolidated your loans on or after July 1, 2010, you have a federal Direct Loan.We also go into detail about the Parent Plus Loan. All to help you understand the process and help pay for the college cost. To make sure to maximize your college grants, student loans and work-study make sure to avoid these common Fafsa mistakes.
If you decide to take out a loan, make sure you understand who is making the loan and the terms and conditions of the loan. Student loans can come from the federal government, from private sources such as a bank or financial institution, or from other organizations. Loans made by the federal government, called federal student loans, usually have more benefits than loans from banks or other private sources. Learn more about the differences between federal and private student loans.
What types of federal student loans are available?
The U.S. Department of Education’s federal student loan program is the William D. Ford Federal Direct Loan (Direct Loan) Program. Under this program, the U.S. Department of Education is your lender. There are four types of Direct Loans available:
Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need.
Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.
How much money can I borrow in federal student loans?
It depends on whether you’re an undergraduate student, a graduate or professional student, or a parent.
If you are an undergraduate student, the maximum amount you can borrow each year in Direct Subsidized Loans and Direct Unsubsidized Loans ranges from $5,500 to $12,500 per year, depending on what year you are in school and your dependency status.
If you are a graduate or professional student, you can borrow up to $20,500 each year in Direct Unsubsidized Loans. Direct PLUS Loans can also be used for the remainder of your college costs, as determined by your school, not covered by other financial aid.
If you are a parent of a dependent undergraduate student, you can receive a Direct PLUS Loan for the remainder of your child’s college costs, as determined by his or her school, not covered by other financial aid.
FAFSA (Free Application for Federal Student Aid). Before each year of college, apply for federal grants, work-study, and loans with the Free Application for Federal Student Aid (FAFSA®) form. Your college uses your FAFSA data to determine your federal aid eligibility. Many states and colleges use FAFSA data to award their own aid. After submission, you’ll receive your Student Aid Report. Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans and Direct Unsubsidized Loans. (Some people refer to these loans as Stafford Loans or Direct Stafford Loans.)
Fees for Federal Student Loans
Most federal student loans have loan fees. These fees are a percentage of the total loan amount.
A loan fee comes out of the amount of money that is disbursed (paid out) to you while you’re in school. This means the money you receive will be less than the amount you actually borrow.
You’re responsible for repaying the entire amount you borrowed and not just the amount you received.
The chart below shows the loan fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after Oct. 1, 2019.
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#studentloans #Federaldirectloans #financialaid
Took your advice 😊
Well done, Ed!
Thank you for watching
Great video. This really helped me understand the benefits and risks associated with these loans. I like the idea of giving my kid “skin in the game”. I will gladly past this video to anyone I know needing clarity on this topic.
My son accepted the $5500 unsubsidized federal loan and also received an athletic scholarship. My wife and I want to pay the difference he’ll owe after taking these two items into consideration. Would you suggest a private loan or parent plus loan? Also, are loans to be applied for by semester or per year?
Can sub subsequent loans have a pre penalty if paid early ty
i work at disneyland barely scraping by even working full time, can barely afford anything but they pay for my school im waiting to get accepted for college and loan offers. when i get accepted Should i continue scraping by as long as i can get food in my stomach or when loan offers come should pull out like a 10k loan and have that in my savings so i can afford things i need for survival while also slowly paying it back ?? i could stack it up as well because i dont have many things that i need to buy that way i can build my savings sky high. how does that sound? am i living in a fantasy or is that legit
Can I take out more money?.. I took out the loan for my first 2 years of community college. And it covered just the amount I needed. But now that I am transferring to a university to finish out my bachelors. I’m scared that I can’t afford school. I am in a high demand healthcare program( respiratory therapy) and it’s advised not to work. I do have a internship though. Which is 16 hours a month. But that makes me just enough for gas. I’m jumping from 150 a credit to 800 a credit. It’s insane the amount of stress I’m going through being scared that I won’t be able to secure the funds for school.
How do i know if my daughter really need to take out this loan they offered her through Financial Aid. Is it because of the net cost ?
I am taking out a smaller loan ( $4000) can I pay the entire loan in full in a few months? I have some money coming in later.
Can I ask the federal loan servicer for more loan amount to pay off dormitory rent expenses?
Under my son FAFSA it's showing direct plus loan?
Thank you for the information. My daughter is a senior at Bryant High School in Arkansas, class of 2023.
Can a student entering senior year this August apply and get Federal loans for the upcoming 2022-2023 school year?
College Senior year?
@@edzamoracollegeprepchannel3820 Yes.
If I have some leftover loan money can I use it for a house down payment or would that not be wise?
Not wise, dude. If you have a debt already, and you intend to purchase a house by putting down a down payment will place you in double the debt. Both school and house, that's if you take out a loan to pay for mortgage. I would say use that money to pay off your school loan debt instead of buying a house.
As of August 17, 2022, have they extended this yet?
Nothing as of yet
Emily Bielski Hackettstown High School class of 2023
Can the parents pay it slowly like the next month after receiving the loan?
You can do a standard 10 year repayment
@@edzamoracollegeprepchannel3820 What I meant is if I or We received the loan today can I start paying it the next month? Thank you for your response and all your content by the way I'm so blind about the way education work here in the US I'm an immigrant never been to school here I have a junior in HS that is planning to be a Pharmacist in college I put away some money for her but the more I've been doing research about college the money I save up seems like enough only for 2 semester so I know loan is the only way after that
@@edzamoracollegeprepchannel3820 Can I start paying it while she's still in college or I have to wait until I receive the final bill once she graduate?
Please Respond with a DTC lenders: Direct to Consumer loans. I’m looking for lenders
Bank of Mum??? Bank of flowers? 😆
Hey Ed, what’s the typical interest rate on the amount that is not subsidized and what are the steps to getting those loans, I have already filled out the FAFSA back in march.
Interest Rates for Direct Loans First Disbursed on or After July 1, 2022, and Before July 1, 2023
Loan Type
Borrower Type
Fixed Interest Rate
Direct Subsidized Loans and Direct Unsubsidized Loans
Undergraduate
4.99%
Direct Unsubsidized Loans
Graduate or Professional
6.54%
Direct PLUS Loans
Parents and Graduate or Professional Students
7.54%
@@edzamoracollegeprepchannel3820 oh wow, I wasn’t expecting the interest rate to be this much.
Yes all rates have gone up Private loans, State Loans, Federal, etc
Hi I took out both unsub and sub loans. These loans are 5k per year and 20k in Total over 4 years. Im working on getting my computer science degree. Was this a good idea ?
I come from a lower income family.
@Tbow If you can secure a career that pays you for your skills you should be great.
can u send me the website or list of steps to get the loan.. and the name of the loan
So can you use the loan money for your own purpose beside using it for the school
Yes actually. Although if you are using it and not going to school there will be a problem
@@luckyluke7997problem as in?
@@Race_Car2ss you’re going to jail
@@xizul gotcha!
But if it’s a grant though?
Why do I only qualify for the unsubsidized federal loan
If it's for undergrad it's because your Fafsa shows you have no financial need to attend the college
So then you can’t call it interest free! 😅 subsidized, interest delayed 6 months, unsubsidized, interest paid immediately. None of which is “interest free”
Or…you could just take a little longer to get through school by working and not owe anything???🤷🏻♂️
True but with the cost of college now it's almost impossible. The College Greed.. I mean Cost is too high
@@edzamoracollegeprepchannel3820 C’mon Ed…you can do a lot better than joining the legions of victim mentality TH-camrs whining about the cost of college. It’s true that there are a lot of very expensive colleges out there, but guess what? You don’t have to attend them. My wife and I put $500 per month(total) into 529’s while our three kids were growing up. 18 years later by the time our oldest started undergrad we had $300k total saved(because of compounding stock market gains). In total we have spent about $400,000 and our three kids have zero debt. An MD, an MBA, and an MFT. Again no debt. How? Well besides saving money while they were growing up our kids went to Community College first, did not attend expensive private colleges, and(gasp) they worked while in school(with the exception of med school). We got zero need based aid along the way, but a lot of merit scholarships. Show me a graduate with six figures of college undergrad debt and I’ll show you a student and their parents who made a lot of bad decisions.
So Spending $400,000 means college is affordable??? I think you made my point college is too expensive
@@edzamoracollegeprepchannel3820 All in for three kids including professional degrees? C’mon, you know that’s a steal. Whole point was that with a little planning and some careful choices a family and their student does not need to borrow. If you *truly* want to help people then you will show them how to do college without borrowing. Or you can whine about the cost of college to parents and students who spend their discretionary income on cars, eating out, smoking drinking, etc and they will all gladly play victim with you. But that doesn’t help anything does it?
@@edhcb9359 Considering you had them go to community college and you got aid and it STILL COST $400,000 that's a a huge amount and I say that being a college advisor for 25 years having helped close to 250,000 families. College is too expensive
IHA 2023
Do not take out loans yall
why?? what if were barely effing scraping by and need something in the savings to survive?? im working my f*cking *ss off and cant save anything for sh*t because its all too expensive. you probably have a black bald business dad that gives you money.