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It is advised to take out a federal loan due to the lower rate of interest
Going to university in the United States can be a costly affair, so it is important that you get as good a deal as possible if you take out a student loan.
There are two types of loan available through the federal government’s direct loan program, with these being subsidized student loans and unsubsidized student loans.
While anyone is able to borrow money for their studies using the unsubsidized student loans, you need to qualify in order to be able to get the subsidized student loans.
The way in which you are able to qualify for the subsidized student loans is by demonstrating financial need, which will be determined when you apply using the Free Application for Federal Student Aid (FAFSA).
The subsidized student loan program is there for undergraduate students who are enrolled at least half time, whereas the unsubsidized student loan program is available for undergraduate, graduate and professional degree students who are enrolled at least half time.
There is a fixed annual percentage rate for subsidized student loans, as this stands at 3.73 percent for loans given out on or after July 1, 2021, through June 30, 2022.
While the fixed annual percentage rate for unsubsidized student loans is also 3.73 percent for undergraduate loans given out on or after July 1, 2021, through June 30, 2022, it increases for other loans.
For example, an unsubsidized graduate or professional degree loan has a fixed annual percentage rate of 5.28 percent for loans given out on or after July 1, 2021, through June 30, 2022. Also, for unsubsidized PLUS loans through the same period, there is a fixed annual percentage rate of 6.28 percent.
Students are always advised to try and take out a federal loan first, as private student loans carry a higher rate of interest.
© Unidad Editorial Información Deportiva, S.L.U. Todos los derechos reservados.
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