How to Go to College on the CHEAP

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Direct Subsidized and Unsubsidized Loans

Now that we’ve covered the best ways to apply for free money we will get into borrowing money. As I said before, this should be a last resort. Think of applying for student loans like entering a marriage. The loan company will own you for 15 to 20 years, ( which is actually longer than most marriages last).

Hands down, the best loan to apply for is through the federal government, or The U.S. Department of Education. You can apply for Direct Subsidized or Direct Unsubsidized federal loans. Direct Subsidized loans are for students who demonstrate financial need. The U.S. Department of Education pays your interest while you are in school. The college you attend determines the amount you can borrow and you can’t exceed that limit.

Direct Unsubsidized loans can be borrowed without financial need. Your school still determines the amount you can borrow. YOU are responsible for paying the interest during all periods of the loan. You can put the interest on hold while in school, but the interest will still accumulate and you will pay it later. If you are eligible for Direct Subsidized loans, then shoot for that option.

The current maximum amount you can borrow for both Direct Unsubsidized loans and Direct Subsidized loans varies based on whether you are a dependent or independent student. This takes us back to the magic age of 24.