Financial hard times are normal, especially when you’re a student. So, taking a direct Stafford loan to help you with tuition and living expenses is not terrible. It doesn’t mean you’re not hardworking.
According to the Chamber of Commerce, the outstanding loan debt in America is $143 billion. This figure shows 21.1 million outstanding personal loans in the U.S., as the average interest rates vary between 10% and 28%.
However, these numbers will probably increase in the coming years, bearing the global pandemic’s effect. Funnily enough, you might think that most personal loan beneficiaries are the poor. Essentially, some rich folks make up the large numbers.
The table below outlines all the knowledge we will expose you in this article regarding a direct Stafford loan. Additionally, you learn how to pay off your loan easily.
Table of Contents
- What is a Direct Stafford Loan?
- How Does a Direct Stafford Loan Scholarship Work?
- Who is Eligible For a DSL?
- How Long Does It Take to Get a DSL?
- How to Apply for the DSL?
- #1. Complete the FAFSA or Renewal FAFSA (for returning students)
- #2. Receive a financial aid award letter by mail or email from your school’s financial aid office
- #3. Contact your school’s financial aid office to accept the financial aid and including student loans
- #4. Sign any associated paperwork such as the Master Promissory Note (MPN)
- How can I repay my Direct Stafford Loan?
- FAQs
- Conclusion
- References
- Author’s Recommendations
What is a Direct Stafford Loan?
Direct Stafford loans are student loans the student must repay after a particular period. So, this period depends on the agreement between the student and the loaning body.
The DSL loans are not for undergraduates alone, as graduate students can greatly benefit from them. Hence, this student’s loan is not segmented to a particular group.
Every student wanting to take up a DSL can access about $5,500. And this amount gradually increases as the student adds more years of study. Graduate students, however, get a bigger loan size.
The interest rate at which the student will be charged depends on the loan the student takes up because there are two types of Direct Stafford Loans. They include;
- Subsidized Stafford Loan
- Unsubsidized Stafford Loan
Take out time to read: Student Finance Maintenance Loan: How To Apply And Get In 2023
Subsidized Stafford Loan
We are all familiar with the word “subsidy,” so we can deduce a clear meaning of the above statement.
However, for clarity’s sake, a subsidized Stafford loan is a loan wherein the government pays the interest while you are in school, during grace periods, and during any deferment periods.
Conclusively, in a time like a pandemic, the government is still responsible for taking care of the interest accrued by your loan.
Unsubsidized Stafford Loan
The unsubsidized loan is just the opposite of the subsidized loan. Essentially, you’re responsible for all the interest accrued by your loan.
The government has no participation in ensuring that you complete your payment. You do it yourself!
Your choice of a loan for yourself will depend totally on your eligibility. However, you can see if you can access student loan scholarships to help you through your study period.
Don’t fail to read: 10 Best Student Loans For Trade Schools | 2023
How Does a Direct Stafford Loan Scholarship Work?
These scholarships follow a stipulated process. You can’t just wake up one morning and decide to pick up a loan scholarship. You must fulfill the needed requirements.
These requirements transit from being either a graduate or undergraduate student to demonstrating financial need and the incapability to study without a loan. Additionally, you must be able to show a loan payback plan.
Essentially, the government awards scholarships to students who have demonstrated and fulfilled the above objectives.
As a beneficiary of this loan scholarship, you can review your loan offer and twerk your agreement with the decision body. Ultimately, this will help when you want to pay off your loan.
Must Read: 21 Full Scholarships To Pay Off Student Loans
Who is Eligible For a DSL?
A DSL has been very helpful in getting many students to their study destination and fulfilling their study dreams despite financial restrictions.
Due to the government’s desire to help these students, they offer these loan programs. The idea of the program is to enable the student’s work hard while studying to earn more money to repay the loan.
For the cause of this program, undergraduate and graduate students are eligible for the DSL.
How Long Does It Take to Get a DSL?
You wouldn’t think you could apply for a DSL and get it delivered to your room the following day. No way! You need to undertake some processes, including the application process.
However, the DSL takes about 2-10 weeks to get approval from the governmental body. So, you have to ensure your documents and application is spotless if you wish to get the DSL.
Also, Read the Full Guide on how to get Student Loans for International …
How to Apply for the DSL?
Applying for the DSL follows certain levels of procedures that are very applicable. There are four stages in the application for the Direct Stafford loan and I’ll take you through the processes.
#1. Complete the FAFSA or Renewal FAFSA (for returning students)
Completing the FAFSA form is the first stage in getting your DSL. Hence, you need to pick up your form at FAFSA.ed.gov.
After you have picked up the yoit form, you must complete it. Ensure you avoid mistakes and correctly input data.
#2. Receive a financial aid award letter by mail or email from your school’s financial aid office
After filling out and submitting the FAFSA form, you will wait to receive the award letter.
This letter will either come by mail or through your school’s financial office. Hence, the letter will summarize your available financial aid, including Direct Subsidized Loans (if eligible).
#3. Contact your school’s financial aid office to accept financial aid and including student loans
After receiving the first mail confirming your request to pick up the loan, FAFSA will contact your school to accept the financial aid.
This financial aid will include the student loan and other payments depending on the type of loan you requested.
#4. Sign any associated paperwork, such as the Master Promissory Note (MPN)
The last stage of the application process involves signing all necessary paperwork.
You must sign the paperwork confirming that you have received the financial aid and will pay it back in due time.
How can I repay my Direct Stafford Loan?
The repayment period for a Stafford loan is usually ten years. However, Stafford loans allow a six-month grace period once you’ve graduated, left school, or decided to enroll less than half-time.
The body will send you information from your repayment plan during this time frame. They usually send the first check you need to pay during this period.
As earlier said, if you’re taking up the interests too, you’ll need to pay them up little by little as they will be added to the checks they send to you.
FAQs
You can contact the DSL at https://studentaid.gov/h/apply-for-aid/fafsa.
It takes about 2-10 weeks to get a DSL.
Undergraduate and graduate students are eligible for a DSL.
The average loan amount for a DSL is $5,500.
Conclusion
The repayment period of 10 years for this loan makes the repayment process very convenient and possible.
Indeed, getting a Direct Stafford loan is a good idea if you’re financially strained and find it difficult to pay your tuition.
You’ll be glad you took this decision because you’ll be heavily rewarded.
References
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