While Stafford (William D. Ford Federal Direct) Loans must eventually be repaid, they can provide you with the funds needed to finance your higher education. Direct Loans are offered at relatively low interest rates and with good repayment arrangements. Before you take out a loan, be sure to develop a budget to make sure you borrow only what you need. For more student loan information (interest rates, repayment and more), visit the Department of Education.

Difference between subsidized and unsubsidized
Annual loan limits
Aggregate loan limits
Repayment
Advantages of Direct Loans
Graduate PLUS Loan Program
How to apply for a Graduate PLUS Loan

Difference between subsidized and unsubsidized

If you are borrowing a Direct Loan you may be awarded a subsidized or unsubsidized loan depending on your financial need.

If you are awarded a subsidized loan, interest will not accrue on your loan while you are enrolled at least half-time. If you are awarded an unsubsidized loan, you will be responsible for the interest while in school. You will receive quarterly interest statements on your unsubsidized loan from your lender. It is recommended that you pay this interest every quarter. If you do not, the interest will be added to your loan amount, which will result in your paying interest upon interest.

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Repayment

You must begin repayment of your student loan, once you:

• Withdraw from school
• Drop below half-time status (fewer than 4 hours during a long semester)
• Graduate

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Advantages of Direct Loans

• Texas State acts as the loan originator—removing the middleman. This streamlining measure allows students at Texas State to get their loans sooner and with less paperwork. 
• Since students do not use a variety of outside lenders, students only have to contact Texas State (not both Texas State and an outside lender) in order to determine the processing status and availability of their loan funds.
• The student’s loan note will not be sold and resold.
• The federal government is and will be the student’s sole lender at Texas State, and students will only have to call one number for service during the life of their Direct Loan. 
• Students will not have to follow different processes for making repayments on their various loans. 
• There are no phantom benefits with Direct Loans. Many loan fee and interest rate reductions offered by lenders in the non-Direct Loan program are often lost when a loan is resold to another loan servicing institution.
• The transition for incoming transfer students is made easier—less paperwork, funds are available sooner, less confusion among students who question why they are not on the Direct program like most Texas State students, etc.
• If transfer students come to Texas State with a number of loans from a variety of non-Direct lenders, students can consolidate all their different loans with their new Direct Loans under the Direct program—allowing students to do business with one lender and follow one process for making repayments and asking questions.
• Some of the non-Direct lenders are either limiting or terminating their participation in the Federal Loan Program. This is not an issue with the Direct Lending Program.

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Graduate PLUS Loan Program

The Graduate PLUS Loan Program may be of interest to you as a graduate student needing additional assistance to cover educational costs after all other federal loans have been exhausted. The program offers a non-need based federal loan with a fixed 7.9% interest rate. Grad PLUS Loans allow you as a graduate student to borrow up to the full cost of attendance minus any other financial aid you are receiving.

We encourage you to consider your options before accruing additional loan debt. For more information on the Federal Grad PLUS Loan as compared with the federal subsidized and unsubsidized student loans, as well as the average loan indebtedness of Grad PLUS borrowers at Texas State, view the Grad PLUS Loan Comparison Chart. 

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How to apply for a Graduate PLUS Loan

Below are the steps that you will need to take in order to be awarded a Graduate (Grad) PLUS Loan and have the funds processed:

• Complete the Free Application for Federal Student Aid (FAFSA), if you have not already done so.
• Accept your Grad PLUS Loan via My Financial Aid.
• Complete and submit a Federal Graduate PLUS Loan Form for each year you are borrowing funds through this program. From the information you provide on the Federal Graduate PLUS Loan Form, we will forward your information to your lender (the Department of Education) for processing.
• If you are not a first-time Grad PLUS  borrower, skip this step. If you are a first-time Grad PLUS borrower, you must complete a Federal Graduate PLUS Loan Master Promissory Note. To complete and electronically sign the promissory note, use your FAFSA 4-digit PIN.
• If you are not a first-time Grad PLUS borrower, skip this step. If you are a first-time Grad PLUS borrower, you must complete Entrance Counseling.

 
To determine how your Grad PLUS funds will be disbursed, visit Receive My Aid.

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