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Federal Subsidized and Unsubsidized Direct Student Loans (FDSL)

View the video: What is the difference between a subsidized and an unsubsidized loan?

Overview

Subsidized and unsubsidized loans are federal student loans that assist students in paying tuition, fees, and related expenses.

Comparison of Federal Direct Loans
Direct Subsidized Loan Direct Unsubsidized Loan
Undergraduate students demonstrating financial need Undergraduate and graduate students do not need to prove financial need
Institution determines amount that can be borrowed based on Cost of Attendance and other aid received Institution determines amount that can be borrowed based on Cost of Attendance and expected family contribution (EFC)
U.S. Department of Education pays the interest on a Direct Subsidized Loan while you are in school at least half-time The U.S. Department of Education does not pay the interest on a Direct Unsubsidized Loan while you are in school at least half-time
You will not pay interest for six months after you graduate or during deferment Interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan) if you do not pay while attending, during deferment, or forbearance
Interest Rates and Fees
Origination Fees
Borrowing Limits
Cumulative Borrowing Limit

Federal Direct Subsidized and Unsubsidized Loan Repayment

Repayment can be managed on the website of your loan servicer, which will be assigned to you by the U.S. Department of Education. While the interest rate on the loan is fixed, interest starts accruing on the loan at the time of disbursement to Tarleton State University. Payments can be deferred until after graduation, as long as you are enrolled at least half-time. Accrued interest can either be paid quarterly while you are in school or capitalized (added) to the loan when you enter repayment. You will accrue future interest based on the principle balance while in repayment. The U.S. Department of Education has a Loan Repayment Estimator you can use to help estimate your loan repayment options.

Additional Steps for First-time Borrowers

Sign a Master Promissory Note (MPN)
Complete Entrance Counseling

Additional Information

If you have other questions about interest, please email the Office of Financial Aid, or call us at 254-968-9070.

The Department of Education deducts the origination fee before you receive any loan money, so the loan amount you receive will be less than the amount you will have to repay