A Direct Unsubsidized Loan is a low-interest loan for eligible students to help cover the cost of college or career school
. These loans are not based on financial need and are available to both undergraduate and graduate students
. Some key points about Direct Unsubsidized Loans include:
- Interest Rate : The current interest rate for Direct Unsubsidized Loans is 5.28% (as of July 1, 2021)
- Repayment : Unlike a subsidized loan, the borrower is responsible for paying interest during all periods of the loan
- Eligibility : Direct Unsubsidized Loans are available to both undergraduate and graduate or professional students
- Application Process : To receive a Direct Unsubsidized Loan, students must complete the Free Application for Federal Student Aid (FAFSA), a Master Promissory Note (MPN), and Entrance Counseling
Direct Subsidized Loans, on the other hand, are based on financial need and are available only to undergraduate students
. With a subsidized loan, the government pays the interest while the student is in school, and the borrower is responsible for paying the interest after graduation
