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Department of Education Direct Student Loans There is a little known option available to students who need financial assistance. This is a direct loan available from the Department of Education. . You can obtain an application by either calling the Department of Education or going online. Doing a Google search will bring you to their website. From there, you can get all the information you need to apply. You can apply for two different types of direct loans - subsidized and unsubsidized. A subsidized direct loan means that the amount of credit you receive is based on the tuition you need. As long as you are in school, you will not be required to make a payment and you will not be charged interest. This is the best option. An unsubsidized direct loan means that there is a limit to the amount of money you can borrow. With an unsubsidized loan, the amount that you require is not taken into consideration. There is considerable interest charged to both these types of credits that you will be responsible for paying. Loan Amount Restrictions The maximum amount for a subsidized loan varies depends on what year you are in college. An undergraduate can receive a maximum of $2,625, and the maximum you can receive on an unsubsidized loan is $4,000. For the second year of college the maximum increases to $3,500 for a subsidized direct loan and $5,000 for an unsubsidized loan. For the remaining years that you are in college, a subsidized loan remains at $5,500. The limit for an unsubsidized direct loan does not increase for the remaining years. If you are a Graduate or professional student, the maximum you can borrow on a subsidized loan is $8,500 per academic year. Graduate and professional students who apply for an unsubsidized direct loan can borrow up to $10,000 per year.
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