Learn More about Federal Direct Unsubsidized Loan Options and Requirements.

USDA Loans

For many years, the U.S. Department of Agriculture (USDA) offered loans for farmers who wanted to purchase equipment or expand their farming operations. However, due to changes in federal regulations starting October 1, 2012, these loans were cancelled. Many people are unaware of how these loans work and what options they have going forward.

FSA Loans

The Farm Service Agency (FSA) offers loan programs to help eligible farmers purchase and maintain farm property, purchase agricultural inputs, and improve production systems. Farmers do not need to own land to receive assistance through the FSA. In 2017, the maximum amount of money that a farmer could receive was $500,000, and the average loan size was $40,000.

SBA Loans

The U.S. Small Business Administration (SBA) provides loans to small businesses and entrepreneurs for financing purposes. A farmer would need to meet certain criteria in order to qualify for an SBA loan. These include having fewer than 500 employees and a business volume greater than $15 million per year. Eligible farms may be able to apply for additional funding if they have been approved to participate in the Commodity Credit Corporation’s Farmer Program. An estimated 30% of applicants were denied approval in 2016.

Rural Development Loans

Rural Development Loans offer low-interest financing designed to encourage investment in rural communities. Since its establishment in 1932, the program has provided over $300 billion to rural America. The interest rate for these loans ranges between 2% and 4%, with no limits on the amount of money loaned out annually. Farmers interested in applying for a rural development loan should research the market before purchasing any equipment or livestock. If applicable, obtaining a loan through a bank is preferable to using a grant or direct subsidy.

Other Loans

Other types of loans include grants and subsidies, revolving funds, and private lenders. Grants and subsidies are funds given away by governments and organizations and sometimes subsidized. Revolving funds allow farmers to borrow money for specific projects and use that money until they repay the debt. Private loans are used by farmers who cannot get access to other forms of financial aid.

Learn More about Federal Direct Unsubsidized Loan Options and Requirements.

What is a Federal Direct Unsubsidized Loan?

A Federal Direct Unsubsidise Loan (Direct Loan) is a loan offered directly by the federal government and is not guaranteed by any private institution. These loans are open to undergraduate students who meet certain eligibility requirements. To qualify, a student must have a low income and his/her family’s annual gross household income cannot exceed $65,000. Additionally, the student must demonstrate financial need and show evidence of having applied for a subsidized Stafford loan. Students may also apply if they currently receive direct aid under IV of the Higher Education Act and are unable to borrow additional funds due to their high total debt load.

How do I apply for a Federal Direct Subsidized Loan?

Students seeking a Federal Direct Unsubsidized Student Loan should apply for their application at www.finaid.org. Students should select the option for “Federal Student Aid” and then click on “Apply Now.” When you get to the page where you enter information, make sure that you are logged in so that you can access your account. If you don’t know how to log in, please refer to our website for instructions. Next, input your email address and password to proceed with your application. You will be able to download the Free Application for Federal Student Aid (FAFSA). FAFSA is a requirement for all applicants, regardless of whether or not they are receiving direct loans. Once you complete the FAFSA, return it to the school you plan on attending, and the college will send you a decision letter. If your school does not require you to fill out the FAFSA, they can still provide you with a determination letter if they find you eligible for Direct Loans. However, most schools require that you complete the FAFSA before they approve your request for direct loans.

Are there any documents that I need to submit when applying for a Federal Direct Subsidy Loan?

The following four documents are required in order to be considered for a direct loan: All of these documents must be submitted to the school you wish to attend. All of these documents should be sent to the school in a single envelope.

Your signed FAFSA: Each year, students should update their FAFSA online. This will ensure that your file is kept current and you only have to answer questions once.

In order to determine your eligibility for Direct Loans, your official transcripts from all colleges attended will need to be submitted. These transcripts will serve as proof that you have met the criteria listed above.

Copies of your tax returns: Tax returns should be submitted to document your annual income and assets. Income statements must be included along with supporting documentation showing your adjusted gross income. Assets include things like stocks, bonds, 401k accounts, etc.

Proof of enrollment: This includes copies of your acceptance letters to the school, your tuition bills, and your class schedules.

What if some of my income goes toward paying off student loans or debts? Will I lose out on direct loan funding?

No, you will not lose out on direct loan assistance. Even though your monthly payments will increase (by as much as 10%), you will still be able to take advantage of the maximum amount of direct loan funding. Most borrowers use 20% of their discretionary income each month to pay down their student loans. Since direct loans are based on your income and assets, there is no ceiling on what you can put towards your loans.

Do I have to be enrolled in classes to receive a direct loan?

Yes, you must continue to be enrolled in classes while you are taking out a direct loan. This means that your eligibility to receive Direct Loans will remain active throughout the duration of your study program.

Learn More about Federal Direct Unsubsidized Loan Options and Requirements.

Direct Subsidized Loans

The federal student loan program offers different types of loans to students depending on their needs, credit history, and financial situation. Students who have low incomes and/or bad credit might qualify for direct subsidized loans. This type of loan allows borrowers to defer payment until after they graduate and begin repaying their loans once they become eligible.

Direct Unsubsidized Loans

Students who do not meet the income requirements or have a poor credit history may still be able to receive direct unsubsidized federal loans. Unlike subsidized loans, these types of loans require the borrower to start making payments immediately. However, borrowers do benefit from lower interest rates than those offered under the subsidized programs.

Federally Guaranteed Student Loans (FGSL)

In order to qualify for a federally guaranteed loan, applicants must demonstrate financial need and pass qualification tests administered by the U.S. Department of Education. Borrowers under 18 years old cannot apply directly for a federal student loan. Instead, parents and guardians must apply on behalf of their students.

Federal Parent PLUS Loans

For students under 21 years old, parents may borrow money for their children’s educational expenses. Parents often choose to take out a parent PLUS loan together with their child’s private student loan for additional funding. Eligibility for this type of loan requires that both the parent and child be either enrolled at least half time or pursuing a full course load.

Private Student Loans

Similar to federal student loans, private student loans allow individuals to borrow funds for education costs. Private institutions offer loans based on merit, while non-profit organizations provide scholarships and grants to qualified applicants. Most lenders set a maximum amount that individual borrowers can cover with a private loan. Borrowers should find out how much their school charges before applying for any type of loan.

Additional Resources

The following websites have information about obtaining federal student aid:

Learn More about Federal Direct Unsubsidized Loan Options and Requirements.

What does the word subsidized mean? A subsidy is defined as money given to someone else in order to help them carry out some action. In government programs, subsidies are often used to give certain groups access to something they otherwise may not have had access to. Subsidies commonly include providing food stamps; paying for gas and car insurance for low-income families; free school lunches for children; grants for college tuition; and much more.

What does the word “unsubsidized” mean? An unsubsidized loan means that the borrower is responsible for all of the costs involved with obtaining this type of loan. The interest rates associated with these loans are sometimes higher than federally subsidized loans. However, after doing research on many different types of loans, borrowers should take advantage of any opportunity to obtain financing for their education. Otherwise, they risk having to pay thousands of dollars in additional student debt over time.

How do I get started? If you want to apply for federal direct unsecured (no subsidized) loans, your first step is to contact a financial aid counselor at your university or local community bank. You can call 1-800-433-9351 between 8:00 a.m. and 5:30 p.m. Monday through Friday, or visit the website below.

Do I need to submit my FAFSA before applying for loans? In general, students who receive financial aid are encouraged to complete their Free Application for Federal Student Aid (FAFSA). Students who don’t qualify for financial aid can still use the FAFSA to learn more about the options available to them. Visit the link above for information on how to file the FAFSA online.

What happens if I qualify for federal direct unsecured (no subsidized) loans? Once you’ve been accepted to a program, you’ll likely find yourself enrolled in a lending agreement that’s called a promissory note. Your lender will send you a letter explaining what you’re signing and what you can expect to pay back. Most lenders require you to make monthly payments for a period of time determined by the amount of money lent.

Will I owe taxes on my loans? Yes. Loans borrowed from government agencies like the Stafford Loan Program are considered taxable income. When you start making payments on your loans, you’ll also have to pay tax on your earnings.

What kind of repayment plan can I choose? There are three different repayment plans offered by the US Department of Education: the Graduated Repayment Plan; the Income Contingent Repayment Plan; and Pay As You Earn. Each plan has its own benefits and drawbacks. 8. Can I consolidate my private student loans? Private student loans are not eligible for consolidation under the William D. Ford Federal Direct Loan Program. However, you may be able to refinance your existing student loans and save money by using a fixed interest rate. To learn more about refinancing your student loans, visit www.finaid.org/refinancing.

CollegeTips StudentLoans FederalDirectLoanProgram

**If you enjoyed this video, subscribe to our channel. New videos every week **

–Watch more educational tutorials —

Learn More about Federal Direct Unsubsidized Loan Options and Requirements.

Federal direct loans provide loan funds to students directly, with no financial aid eligibility requirements.However, lenders may require some documentation and a co-signer. A federal subsidized loan provides funding to the borrower who does not have independent financial need. Unlike unsubsidized loans, they do not require repayment until after graduation, and no financial qualifications exist.

Federal Loans Offered to Students

Direct Subsidized Loans

The Department of Education offers three types of federal loan programs for undergraduate students: Direct Subsidized Loans (DSL), Direct Unsubsidized Loans (DUSL), and Direct PLUS Loans. Each type of loan differs in terms of its eligibility requirements, costs, and interest rates.

*What Are Direct Subsidized Loans?

The Direct Subsidized Loan program is designed specifically for undergraduates with demonstrated financial need. Borrowers must meet specific income levels, while those with family incomes of up to $80,000 qualify for these loans. To receive a Direct Subsidized Loan, students must file a Free Application for Federal Student Aid (FAFSA).

*Who Qualifies?

Students are enrolled at least half time.

Unmarried students must demonstrate financial hardship in order to receive this loan.

Borrowers should expect to pay approximately $4,000 over the course of their education.

Direct Subsidized Loan Eligibility

Income Limits

To be eligible for a direct subsidized loan, borrowers must fall under the following income limits:

Household Income Up to $40,650

►HEY, we’ve got more valuable information here: ►CLICK HERE LOANS FOR STUDENTS◄

►Cloud of related items ▼

►Loans For Students◄

bloque2x

Summary