Loan Terms | Fast facts about federal student loans

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•   Subsidized loans, for students with demonstrated financial need, have the interest on them paid by the government while the student is enrolled
•   Unsubsidized loans accrue interest while the student is in school and the student is responsible for repayment of that interest in addition to the loan amount
•   Perkins loans, for students with demonstrated financial need, have a nine month grace period, a fixed interest rate of 5% and are eligible for loan cancellation or forgiveness
•   Stafford loans have a six month grace period, a fixed interest rate of 6.8% for unsubsidized loans and 5.6% for subsidized loans and are eligible for loan cancellation or forgiveness
•   Federal loan yearly limits for dependent undergraduate students are $5,500 for freshmen, $6,500 for sophomores and $7,500 for later years
•   Federal loan yearly limits for independent undergraduate students are $9,500 for freshmen, $10,500 for sophomore year, and $12,500 per year for later years
•   Loans can be forgiven or cancelled if you teach in a low-income or subject-matter shortage area or after ten years of repayment if you work as a full-time public employee, or if you are disabled and fall under no “substantial gainful activity” when tested
•   All federal loan and grant programs require completion of the Free Application for Federal Student Aid (FAFSA) form

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