Some students with a direct loan have a subsidized Stafford Loan. The subsidized loan has an interest subsidy.
All students awarded those direct loans can count on the government to cover their interest payments while they are still in school..
Not all Stafford Loans are direct student loans, and not all direct student loans are subsidized. Where students do not show tremendous need, the government might award an unsubsidized Stafford Loan. Such unsubsidized loans do not come with an interest subsidy.
PLUS Loans represent a third type of direct student loan. PLUS loans are low interest loans for graduate students and parents.
As with the other direct student loans, the application for the PLUS Loans entails submission of a FAFSA and a MPN.
Not every student who receives one of the direct student loans gets the same amount of money. The amount of money awarded to the recipient of a direct student loan depends on three different factors.
The school costs will dictate to a large extent the size of the direct student loan. The government will also adjust its loan amount to account for any other aid that a student might expect to receive.
Finally, the distribution of funds for the direct student loans depends on the expected contributions from each student’s family.
After the Department of Education has examined those three factors, then it will provide a needy student with funds that should adequately cover his or her tuition costs.
Most students can get-by with loans of $8,000; they then obtain added money from additional on and off-campus sources.
