Federal Direct Loan: Subsidized

Subsidized loans are available to students who demonstrate financial need as defined by the FAFSA. The government pays the interest on a subsidized loan while the student is enrolled in school. The loan goes into repayment six months after the student graduates or is no longer enrolled half time.

  1. Eligibility for the Direct Loan interest subsidy will be limited for new borrowers on or after July 1, 2013. The law restricts the period of time for which a borrower may receive subsidized loans, in the aggregate, to 150 % of the published length of the student’s current educational program. Once the student reaches that limit, he or she may borrow only unsubsidized loans, and interest begins to accrue on the student’s outstanding subsidized loan.

  2. For new loans first disbursed on or after July 1, 2012 through June 30, 2014, the federal government will no longer pay the student loan interest during the six month grace period.

  3. The grace period is the six (6) month between when the student graduates or drops below half-time status and the time when student moves into repayment.

 

Elimination of the Interest Subsidy for Direct Loans during the Grace Period

 

For new loans first disbursed on or after July 1, 2012 through June 30, 2014, the federal government will no longer subsidize (pay) the student loan interest during the six month grace period. The grace period is the time between when the student graduates or drops below half-time status and the time when the student must start repaying the loan. Students are encouraged to check with their Loan Servicer for any available options to assist with their loan repayment. 

 
 

Interest Rates and Fees for Loans with a first disbursement date between July 1, 2013, and June 30, 2014

 

Program of Study

Fixed Interest Rate

Loan Fees

Federal Direct Subsidized Loan

3.86%

1.051% *

     

*These loans have a 1.051% Origination Fee.  This results in a net Loan Fee of 1.051%, which will be deducted from the gross amount of the loan.

 

Subsidized Annual Loan Limits

Dependent Students 

Annual Loan Limits

Undergraduate First Year

$3,500

Undergraduate Second Year         

$4,500

   

Independent Students

Annual Loan Limits

Undergraduate First Year

$3,500

Undergraduate Second Year

$4,500

 

Aggregate Loan Limits and Cuesta Maximum

Students who borrow Federal Stafford Loans have aggregate lifetime loan limits. This means that there is a maximum a student may take out in Federal Stafford Loans for his or her educational career.

Cuesta College reviews aggregate loan amounts prior to awarding loans for the academic year. Students are encouraged to check the aggregate amount of loans they have taken out during their academic careers through the National Student Loan Data System (NSLDS).

At Cuesta College, any student who has already accumulated $20,000 or more in student loan debt must submit a Loan Maximum Appeal form in order to receive more student loans.