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While the student was enrolled for at least half-time they were not expected to pay any principal payments on the loan, a status referred to as in-school deferment. Deferment of repayment continued for six months after the student leaves school by graduating, dropping below half-time enrollment, or withdrawing, referred to as the grace period.
Federal Direct Subsidized Loan – Part of the Federal Direct Student Loan Program, Federal Direct Subsidized loans are need-based loans whose interest is paid by the government while the student is enrolled at least half time. Direct Subsidized Loans have fixed interest rates for the life-time of the loan.
The student makes no payments while enrolled at least half-time. If a student drops below half time or graduates, a six-month deferment begins. If the student returns to least half-time status, the loans are again deferred, but a second episode no longer qualifies and repayment must begin.
The Free Application for Federal Student Aid (FAFSA) must be submitted for each year of enrollment. One form covers both semesters of the school year with payments issued every quarter or semester.
Parent PLUS borrower deferment for parents who received a Direct PLUS Loan to pay for their child’s education, and the student is enrolled at least half-time at an eligible college or career school.
Americans with federal student debt got another reprieve recently when President Joe Biden extended the student loan payment moratorium until Aug. 31 as a way to help borrowers "breathe a little...
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