Federal Direct Subsidized Loans are low-cost, fixed-rate loans from the U.S. Department of Education
Students who demonstrate need are eligible to receive these government funded and subsidized student loans.
Federal Direct Subsidized Student Loans are available for students who have demonstrated financial need. This loan is more favorable than unsubsidized student loans, because the U.S. Department of Education pays the interest while the student is in school, during the six-month grace period after school, and during a period of deferment.
The maximum Federal Direct Student Loan amounts are $5,500 for the first-year, $6,500 for sophomore year, and $7,500 per yer for junior and seniors, based on credit hours earned. The fixed interest rate and origination fee are set by the federal government each year. The U.S. Department of Education is the lender, though the entity you deal with – your loan servicer – can be a private business.
For information regarding loan types, interest rates, fees, and repayment, go to the Federal Student Aid website.