In working with students and their families on the college planning and financial aid process, I am frequently asked how students can apply for the direct Stafford loan. Let me start by saying, although they – and you – may be asking about the Direct Stafford Loan, the loan is no longer called the Direct Stafford Loan. That is something it was called years and years ago. Currently, this loan is referred to as the Federal Direct Student loan. Below is more information on this type of loan, along with how students can apply and qualify for it.
What is the Federal Direct Loan?
The Federal Direct Student Loan (formally called the Direct Stafford Loan) is truly a student loan. It is the student who applies for and receives this loan. Parents do not cosign for this loan.
What Is the Maximum Direct Loan Amount?
The maximum amount you can receive in a Federal Direct Loan depends upon your year of college:
• Freshman Year: $5,500
• Sophomore Year: $6,500
• Junior Year: $7,500
• Senior Year and Beyond: $7,500
Is this Direct Loan Subsidized?
If the student financially qualifies, a portion of the Federal Direct Loan can be subsidized, meaning the federal government will pay the interest while the student is in school at least half-time, for the first six months after the student leaves school (grace period), and during a period of deferment. This qualification is based on financial need as demonstrated by the FAFSA form.
Below are the amounts of the subsidized portion of the loan, assuming the student qualifies:
• Freshman Year: $3,500
• Sophomore Year: $4,500
• Junior Year: $5,500
• Senior Year: $5,500
How You Apply for and Accept the Federal Direct Loan (Stafford Direct Loan)
1. Fill Out the FAFSA
To apply for the Federal Direct Loan, you must first complete the FAFSA form. The FAFSA is the initial part of getting any federal student aid, including the direct loans, as well as receiving financial aid at many institutions. So, it is important to complete this form as early as possible. The form becomes available October 1st of every year. You need to fill out this form and add the schools to which you will be applying so that they have your financial information.
2. Accept the Loan from the School You Will Be Attending
Once the form is complete and you have been accepted to a school you will receive and award letter that will list the Direct Student Loan and its amount. Once you have accepted admission at the college of your choice, you can then accept the Direct Student Loan through the college. The school you will be attending will then notify the government about your attendance. You will then be awarded the loan and it will be credited to your bill. Any student can qualify for the Federal Direct Loan – even if your family makes $2 million a year. The only part of the loan that hinges on financial need is the subsidized portion.
Once you receive notice that you are awarded the loan, you will need to accept the loan.
3. Complete Student Loan Counseling
After you are awarded and accept the loan, you will need to complete the student loan counseling, which takes about 45 minutes.
4. Sign the Promissory Note
To finalize the application and acceptance of the Federal Direct Loan, you will need to sign the promissory note.
How Students Apply for the Direct Stafford Loan Takeaway:
Applying for the Federal Direct Student Loan (formerly referred to as the Direct Stafford Loan) involves four steps: (1) completing the FAFSA; (2) being awarded and accepting the loan from the school that you’re going to attend; (3) doing the student loan counseling; and (4) signing the master promissory note.
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