Federal student loans (in the student’s name) from the U.S. Department of Education are considered the best place for students to start. These loans offer benefits like flexible repayment options (for example, making monthly payments based on your income or deferring payments during periods of hardship).
The financial aid office at each school will determine whether you’re eligible for federal loans, based on the information you reported on your Free Application for Federal Student Aid (FAFSA).
>VSAC recommends that you accept the maximum in federal student loans—Direct Subsidized first
(if offered), then Direct Unsubsidized—before considering any other types of loans.
Direct Subsidized and Unsubsidized student loan limitsFirst year (up to $3,500 may be in subsidized loans) | $5,500 |
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Second year (up to $4,500 may be in subsidized loans) | $6,500 |
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Remaining years (up to $5,500 may be in subsidized loans) | $7,500 |
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Cumulative (undergraduate) | $31,000 |
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Sub or Unsub?
Federal Direct Subsidized loans, for students with greater financial need, do not accrue interest while a student is in school or in a deferment period. Your school will determine whether you’re eligible.
Federal Direct Unsubsidized loans, available for all students regardless of financial need, start accruing interest when the loan is disbursed (while you’re still in school).