• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

FCAA

The Financial Counseling Association of America

Find a Credit Counseling Agency

Service Request Widget

Get Help… 1-800-450-1794

  • Services
    • Debt Freedom Tool
    • Debt Help
    • Debt Management Plans (DMP)
    • Housing Counseling
    • Credit Report Reviews
    • Bankruptcy Certificates
    • Financial Education
    • Student Loan Counseling
      • Why Choose Us?
      • Student Loan Repayment Plans
      • How to Pay for College
  • About
    • About FCAA
    • Join FCAA
    • my FCAA
  • Find A Credit Counselor
  • 2023 FCAA Conference
  • Consumer Advice
  • Student Loan Training
  • Contact
    • Press
    • Affiliate Program
  • my FCAA
    • About my FCAA
    • Login

Direct Subsidized Loans

Direct Subsidized Loans offer an interest benefit where the government will pay any interest that accrues during periods of deferment.

Eligible Borrowers

To qualify, students must show financial need. Students must also be U.S. citizens or eligible non-citizens and be enrolled at least half-time in a qualifying program.

As of July 1, 2012, graduate students can no longer qualify for Direct Subsidized Stafford Loans. Graduate students can still qualify for Direct Unsubsidized Loans.

Repayment Terms

  • While in school, the government will pay the interest that accrues on the loans.
  • Loans enter repayment 6 months following the borrower’s graduation, withdrawal, or if the borrower drops to less than half-time enrollment.
  • During the 6-month grace period, the government will pay any interest that accrues on the loans, with the exception of subsidized loans with a first disbursement on or after July 1, 2012, and before July 1, 2014.
  • In some circumstances, the borrower can qualify for a deferment where loan payments are postponed for a period of time. During deferment, the government will pay any interest that accrues on the loans.
  • A borrower may be able to request a forbearance to temporarily stop payments. During forbearance, however, interest will continue to accrue, and any unpaid interest will be capitalized.
  • Upon entering repayment, loans are set to a Standard 10 year repayment term. Borrowers can switch to an alternative repayment plan if necessary.
  • There are no prepayment penalties for borrowers who choose to pay off their loans ahead of time.

Current Interest Rate

Direct Subsidized Loans first disbursed on or after 7/1/2013 and before 7/1/2014 3.86%
Direct Subsidized Loans first disbursed on or after 7/1/2014 and before 7/1/2015 4.66%

Primary Sidebar

Paying for College

  • Financial Aid Application Process
  • Financial Aid Timeline
  • Financial Aid Awards
  • Rights & Responsibilities
  • Student Loan Types
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Perkins Loans
  • PLUS Loans for Parents
  • PLUS Loans for Graduate or Professional Students
  • Private or Alternative Loans
  • Institutional Loans
  • State Loans

Copyright © 2023 · FCAA · site by iKnow

Font Resize
Contrast
Accessibility by WAH