Federal Direct Student Loans are low-interest loans from the U.S. Department of Education to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. Eligible students borrow directly from the U.S. Department of Education (the Department) at participating schools.
This is the largest federal aid program, and it consists of two types of Federal Direct Student Loans: subsidized and unsubsidized.
The primary difference is the point at which interest begins to accrue. No interest will accrue on a subsidized loan and no principal will be due until the end of the six-month grace period that will begin when you graduate, leave the University, or drop below half-time enrollment (6 credits). Your offer may include a subsidized loan if you have financial need.
Interest on an unsubsidized loan begins to accrue on the day that the loan is disbursed and continues until the day that you repay the loan in full. You can pay the accumulating interest while you are in school, during the grace period, or during deferment; or you have the option of capitalizing the interest (adding unpaid, accumulated interest to the total unsubsidized amount borrowed when you begin repayment). This may give you a way to postpone making interest payments, but it also increases the total cost of your unsubsidized loan.
Students selected for verification by the Department of Education are required to submit additional forms to the office of Financial Aid The school must have also received a valid FAFSA result. If the student fails to complete the verification process, or does not have a valid ISIR then the file will remain incomplete and federal aid will not be awarded.
If your FAFSA is selected for verification , additional documentation that may be required is listed below:
- Verification Worksheet (Dependent or Independent)
- IRS Tax Transcripts and W-2 forms (if applicable)
- Other forms and documents as listed:
- Unemployment verifications (letter of termination)
- Unemployment benefit statements
- Online benefit account print out
- Termination letter from employer
- Food Stamp verification (upon request)
- Child Support verification (upon request)
- Verification if required of citizenship:
- U.S. birth certificate
- Passport- verify admittance date to United States
- Permanent Resident Card
- I-94 card-indication Refugee, Asylum and other documents per request
The cost of attendance (budget) is used to establish a student’s financial need, as it sets a limit on the total aid that a student may receive in total aid. Calculating your financial need, your Student Aid Index (SAI) is used to determine your financial need.
Example: Cost of Attendance $20,000
Student Aid Index: –1500
Family Need = $21,500
To determine what your family is able to contribute to the total college cost, you must complete the Free Application for Federal Student Aid (FAFSA). This standard application form guarantees that every family is treated equally and fairly when schools are considering financial aid eligibility.
The FAFSA information is used to calculate your Student Aid Index (SAI), which reflects what you and your family can contribute to your education for one year. The Financial Aid Office calculates your financial need or eligibility by subtracting your SAI from the estimated costs for one year of education.