A student who demonstrates need qualifies for a Direct Subsidized Loan. No interest is charged on a Direct Subsidized Loan while enrolled on at least a half-time basis. Students are also provided with a six-month grace period after graduation or dropping below half time before repayment begins. During the grace period, no interest is charged for Direct Subsidized Loans. Direct Unsubsidized Loans Need is not a factor in determining eligibility for the Direct Unsubsidized Loan.
All students are eligible regardless of personal or family income.
Interest begins to accrue immediately with the unsubsidized loan, which can be paid while the student is in school, or it can be capitalized. Capitalizing Interest With the Direct Unsubsidized Loan, students have the option to have interest capitalized while they are attending at least half time. This means that unpaid, accumulated interest is added to the principal balance of the loan, or the amount originally borrowed. Though capitalizing interest postpones making interest payments, it will increase the amount that will have to be repaid. Status - Dependent or Independent Student Length of the academic program in which the student is enrolled Rate of Interest Interest Rates for Federal Direct Loans are variable and are adjusted once a year, on July 1.