Paying for school could cost you a fortune. Especially if your course is a tough one that requires a lot of dedication, it could be a real pain to poise between your work and school. In any scenario, national direct student loans funded under the Federal direct student loan program could really come in handy to get through graduation.
What Is National Direct Student Loan Consolidation?
National direct student loans are low-interest payable loans determined to aid students who are in economic distress and are offered to both undergraduate and graduate U.S students (citizens, nationals and anyone residing in the U.S rather than on a temporary basis). Formerly called National defense loans, they are now referred to as Perkins loans.
The national direct student loan coalition is solely responsible for sanctioning the loan to the needy students, and though the money comes from the federal government, the participating schools that sanction the loans themselves receive the payment and the government does not insure the loans.
The National direct student coalition also provides mentoring to institutions that are seeking information regarding the service. In a process of expansion, the National Direct Student Coalition is firmly motivated and prepared to include all the schools of the U.S Educational System under this service. Owing to its effectiveness, in the year 2008-2009 more than 700 schools got themselves registered under this system.
Under the rules set, the funds are provided to the participating institutions on their base guarantee and the Institution’s pro rated share value. Also, the aggregate need of the eligible students in attendance is pre-determined. The Institution needs to bear about 25% of the strength of the funding. The participating Institution also receives compensation for certain loan cancellations. The national direct student loan is meant for individuals and institutions of Higher Education (IHEs) that can apply for an allotment of funds to be awarded to undergraduate, graduate and vocational students who have got enrolled at the participating school.
The amount of the national direct student loan greatly depends on how soon the needy apply; the intensity of the need and the school’s funding capabilities. These loans can provide up to $5,500 for undergraduate students’ study each year, and a total of $27,500 for students that have completed two years of education towards a bachelor’s study. However, the amount that you might actually be able to borrow could be less. As each participating school is allocated a certain amount of fund each year for the loan purpose, this comes to exhaustion as the number of applicants approved for the loan increases. And once the available funds are exhausted, the Institution can give out no more student loans in that particular year.
How to Apply For National Direct Student Loan Consolidation?
The interest on national direct student loans is usually fixed at 5%. There are no other hidden fees or charges involved whatsoever, with the national direct student loan. If you are filing for a national direct loan, you need to fill out the Free Application for Federal Student Aid (FAFSA) and just wait till your application to be considered.