What is a Federal Direct Unsubsidized Loan?

If you’re considering taking out a Federal Direct Unsubsidized Loan, you’re probably wondering what exactly it is. Here’s a quick rundown of everything you need to know about this type of loan.

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What is a Federal Direct Unsubsidized Loan?

A Federal Direct Unsubsidized Loan is a need-based loan that is available to undergraduate, graduate, and professional students. The interest on this loan starts accruing from the date of disbursement and will continue to accrue until the loan is paid in full. The borrower is responsible for all interest that accrues on the loan.

What are the interest rates for a Federal Direct Unsubsidized Loan?

The interest rate for a Federal Direct Unsubsidized Loan is the same as the interest rate for a Federal Direct Subsidized Loan. The only difference is that the interest on an unsubsidized loan accrues from the time the loan is first disbursed.

What are the fees for a Federal Direct Unsubsidized Loan?

There is a 1.062% origination fee for Federal Direct Unsubsidized Loans first disbursed on or after October 1, 2019, and before October 1, 2020. This means that for every $100 you borrow, you will be responsible for $1.06 in fees. This fee is deducted from your loan proceeds, so you will not need to pay it out of pocket.

What is the maximum amount I can borrow with a Federal Direct Unsubsidized Loan?

There are limits on the amount in Federal Direct Unsubsidized Loans that you may be eligible to receive each academic year (annual loan limits) and in total (aggregate loan limits). The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. These limits vary depending on your grade level and dependency status.

What is the repayment period for a Federal Direct Unsubsidized Loan?

The repayment period for a Federal Direct Unsubsidized Loan depends on the amount of the loan. Loans up to $5,500 have a repayment period of 10 years. Loans above $5,500 have a repayment period of 20 years.

How do I apply for a Federal Direct Unsubsidized Loan?

The first step is to fill out a FAFSA form which can be found on the official website. After you have completed and submitted the form, you will then need to contact the financial aid office at the school you are planning on attending. They will then give you the necessary paperwork to fill out.

How do I complete the Free Application for Federal Student Aid (FAFSA)?

You must complete the Free Application for Federal Student Aid (FAFSA) form to apply for a Federal Direct Unsubsidized Loan. The FAFSA form is available online at www.fafsa.gov. You will need to provide your social security number, driver’s license information (if you have one), and your Alien Registration Number (if you are not a U.S. citizen). You will also need to provide financial information, such as your parents’ income tax return (if you are a dependent student) or your own income tax return (if you are an independent student). Be sure to list the University of Maryland – College Park’s federal school code, 002103, on your FAFSA form so that we will receive your FAFSA information.

What other information do I need to provide in order to apply for a Federal Direct Unsubsidized Loan?

In order to complete the Free Application for Federal Student Aid (FAFSA®) form, you will need to provide information about your:
-Financial situation
-Household size
-Dependents
-Taxes
-Assets

What happens after I apply for a Federal Direct Unsubsidized Loan?

After you apply for a Federal Direct Unsubsidized Loan, the next step is for your school to certify your loan. This means that your school will confirm your enrollment, your cost of attendance, and other information. Once your loan is certified, the money will be sent to your school.

How will I know if I am approved for a Federal Direct Unsubsidized Loan?

If you are approved for a Federal Direct Unsubsidized Loan, your school will notify you of the amount you are eligible to borrow. The notification will include information about the interest rate and fees associated with the loan.

How will I receive my Federal Direct Unsubsidized Loan?

If you are approved for a Federal Direct Unsubsidized Loan, the loan will be disbursed to your school first and then you will receive the remaining loan funds in two disbursements. The first disbursement will cover tuition and fees, room and board, and other school charges. The second disbursement will be sent to you directly, minus any amount that your school applies to other charges.

When do I begin repaying my Federal Direct Unsubsidized Loan?

You’ll begin repaying your Federal Direct Unsubsidized Loan shortly after you graduate, leave school, or drop below half-time enrollment. The repayment period for a Direct Unsubsidized Loan is up to 10 years.

What are my repayment options for a Federal Direct Unsubsidized Loan?

The Federal Direct Unsubsidized Loan is a loan that is not based on financial need. The interest on this type of loan begins to accrue as soon as the loan is disbursed. You have the option to pay the interest while you are in school or allow it to accrue and be capitalized when you enter repayment.

What is the Standard Repayment Plan for a Federal Direct Unsubsidized Loan?

The Standard Repayment Plan for a Federal Direct Unsubsidized Loan has a fixed interest rate and the payments are spread out over a 10-year period. You will have to pay off the entire loan within 10 years, including any interest that has accrued.

What is the Graduated Repayment Plan for a Federal Direct Unsubsidized Loan?

The Graduated Repayment Plan for a Federal Direct Unsubsidized Loan is a repayment option for Direct unsubsidized loans,Direct PLUS Loans for graduate or professional students, and Direct Consolidation Loans. With this plan, your monthly payments start out low and then increase, usually every 2 years. The length of your repayment period will be up to 10 years.

What is the Extended Repayment Plan for a Federal Direct Unsubsidized Loan?

The Extended Repayment Plan is available to borrowers with Federal Direct Unsubsidized Loans as well as Federal Direct PLUS Loans. Under this plan, your monthly payments will be lower than they would be under the Standard Repayment Plan, but you will pay more interest over the life of the loan because you will be extending your repayment period.

If you have a Direct Unsubsidized Loan or a Direct PLUS Loan that is not part of a Direct Consolidation Loan, and you have not previously selected a repayment plan, your loan will automatically be placed on the Extended Fixed Repayment Plan. You can switch to another repayment plan at any time by contacting your loan servicer.

With the Extended Repayment Plan, your monthly payment amount will be calculated by dividing your total loan balance by the number of months in your repayment period, plus accrued interest. Your repayment period on this plan can last up to 25 years, depending on the total amount of your eligible loans.

What are my rights and responsibilities as a borrower of a Federal Direct Unsubsidized Loan?

What are my rights as a borrower of a Federal Direct Unsubsidized Loan?

As a borrower of a Federal Direct Unsubsidized Loan, you have the right to:
-Receive counseling from your school about your rights and responsibilities as a borrower
-A grace period of six months after you graduate, leave school, or drop below half-time enrollment before you must begin repayment
-A choice of repayment plans
-Deferment or forbearance of your loan in certain situations
-A disclosure statement before you enter into a promissory note that explains the terms and conditions of your loan

What are my responsibilities as a borrower of a Federal Direct Unsubsidized Loan?

As a borrower of a Federal Direct Unsubsidized Loan, you are responsible for:
-Completing entrance counseling at studentaid.gov before your first Federal Direct Unsubsidized Loan is disbursed.
-Signing and returning a Master Promissory Note to the Department of Education at studentaid.gov before your first Federal Direct Unsubsidized Loan is disbursed.
-Repaying your loan(s).
-Paying any interest that accrues on your unsubsidized loan(s).
-Notifying your loan servicer(s) of any changes to your name, address, school, or level of enrollment.