<p>Hello!</p>
<p>I have just started to read up on student loans and I have some questions:</p>
<p>Do you take the student loan all at once or do you take one every year?
For example: If you're going to need $20k in student loans do you take $2.5k a semester, $5k a year, or $20k all at once? Also, if you take it all at once does the lender send the money directly to the school and the school just holds on to the money?</p>
<p>Thank you!</p>
<p>The only STUDENT loans the student’s guaranteed to receive…that they can take in their own name (cosigner needed) are the Direct Loans. They are given annually to anyone who files a FAFSA. For freshman year $5500, sophomore year $6500, junior year $7500, senior year $7500.</p>
<p>You have to complete a new FAFSA each year to receive these loans.</p>
<p>They are disbursed directly to your university, usually a couple of weeks into the term.</p>
<p>
In your case, Federal government will send $2500 directly to your school at the beginning of Fall & Spring semesters; if you maintained (at least) half-time student status.</p>
<p>You have to file FAFSA again for your next year’s Direct Loans which could be more/less than $5000.</p>
<p>The amounts for the Direct Loan are not “more or less $5000” per year.</p>
<p>They are:</p>
<p>$5500 freshman year
$6500 sophomore year
$7500 junior year
$7500 senior year</p>
<p>All you need to do is complete the FAFSA for each year to be able to take these loans out in the student’s name only.</p>
<p>
These are the upper limits of the Direct Loans. In OP’s example, I’m trying to say that the next year’s loan amount may not be $5000 - this year’s amount again.</p>
<p>There are max. income limits to receive the subsidized federal Stafford loans. Those subsidized loans are $2,000 less than the total amounts listed above. For example, your freshman year as a full time student, most students can receive $3500 of subsidized staffords and $2000 of unsubsidized staffords. </p>
<p>If you don’t use your allotted amount freshman year, you can’t take out extra loans in a later year. Therefore, it is usually better to spread the spending of your savings out over 4 years, and to take out the subsidized loans even if you don’t need them right away.</p>
<p>Right now, the loan interest rates are the same (slightly less than 4%), but the feds pay the interest while you are in school for the subsidized loans.</p>
<p>
See [Direct</a> Loans?Calculators and Interest Rates](<a href=“http://www.direct.ed.gov/calc.html]Direct”>http://www.direct.ed.gov/calc.html)
Undergraduate’s Direct Loans (7/1/13-6/30/14) interest rate is 3.86% fixed for the life of the loans.</p>