Sorry if information regarding this is somewhere on the website, but I’m sort of having trouble understanding how loans work. I looked it up online as well, but it’s still confusing to me. On both my Oxford and Emory award offers, I got a “Federal Direct Loan” for 5500, plus a 44k grant and a 2.5k work study.
How does this “federal direct loan” work?
You will complete the loan documents through the school. You will have half available for the fall and half for the spring. $1000 each semester will be unsubsidized (maybe more, but it looks like for you it will be the minimum, $1000) and the rest will be subsidized by the government. Once the loan ($2750) is disbursed, the school will apply it to your bill. If there is any left over after your entire bill amount is paid (after the grant is applied), you’ll receive a check or checking account ACH for the balance. Interest will run on the loan, but the government will pay the interest on the subsidized amount until 9 months after you are no longer in school. You don’t have to pay the rest, but interest will accrue on it.
For work study, you have to earn it before you get paid, so you can’t count on it being there on day one.
We have NO WAY to know if the loan will be subsidized partially…or not…because we don’t know this student’s actual calculated financial need.
Has something changed? My kids both had Direct Loans…and the grace period after graduation was SIX months, not nine.
To the OP, you also will,annually have the option of paying the interest only on that loan if it is unsubsidized.
It depends on each school’s policy. Many schools will first reduce or eliminate federal loans and/or work study if outside scholarships are received, before reducing grant aid.
A post above indicates the breakdown of OP’s loans
If the subsidized loan was there, the award would have been broken into subsidized and unsubsidized amounts, because even in the best-case scenario, the full 5500 maximum loan amount is not subsidized. The very best a low-EFC student can get is 3500-subsidized, 2000-unsubsidized.
The federal loan FAQ is here: https://studentaid.ed.gov/sa/types/loans
Not sure what your exact question is.
To get a direct loan you will need to fill out the FAFSA every year. The first year you accept the loan, you will need to complete the Master Promissory Note online. This is basically the formal legally binding loan contract that sets the terms of the loan. I believe you will also have to complete the online loan counseling. You also need to go to your financial aid portal for your school and accept the loans. You are not require to take the full amount. You only need to take what you need up to the federal limit (5500, 6500, 7500, 7500 per year). As stated above, half of the loan will be applied to your outstanding balance at your school each semester. After paying all direct billed amounts, if there is anything left over you will receive a refund. Some schools will issue an refund quickly while others will take a long time.
OP- the loan is money you need to repay. With interest, over time, after you graduate. The 44K Grant is money the college gives you- you do not need to pay it back. You will likely need to be a full time student to qualify for the grant, so if you have a semester where you drop a few classes you need to stay on top of what is required in order to keep the money. Work Study is NOT money that gets handed to you. When you get to campus, you will look for a job (most colleges have an office and a portal so you can see what jobs are out there and you are qualified for) and after you interview for them, you will get one. You show up for work every week and you get paid. So this is not money that will show up in August- over the course of the year you will work your hours and earn your paycheck.
Is this your question???
As it stands right now, my financial aid package is as follows:
$2.5k work study
$46,337 grant
$3500 Federal Direct Subsidized Loan
$2000 Federal Direct Unsubsidized Loan
I’d call the financial aid office, but they’re on break until January.