FAFSA Direct Loans confusion - do I need to find my own lender?

Good news! You don't need to find a lender for Direct Loans. These come directly from the federal government (that's why they're called "Direct"). When you accept them in your school's portal, you're just telling your school you want those loans. After that, you'll need to complete entrance counseling and sign a Master Promissory Note (MPN) on studentaid.gov. Your school's financial aid office will then process everything and the loan funds will be sent directly to your school to pay your bill. Any remaining amount gets refunded to you for other expenses.

congrats on getting your aid package! most people get confused about this part lol. direct loans are from the government not banks. private loans are the ones where u need a lender (avoid those if possible, the interest is crazy).

To answer your question about deadlines - yes, there are deadlines for completing the entrance counseling and MPN, but they vary by school. Some schools won't disburse your funds until those steps are complete, so I'd recommend doing them as soon as possible after accepting the loans. The entrance counseling takes about 30 minutes and the MPN takes about 15 minutes to complete. You'll need your FSA ID to log in and complete both.

Let me tell you about the difference between subsidized and unsubsidized loans since you asked! With subsidized loans, the government pays the interest while you're in school (AMAZING benefit). For unsubsidized, interest starts accumulating immediately even while you're studying. Accept the subsidized loans FIRST always!!! I didn't understand this when I started and regret taking the unsubsidized ones when I had other options.

Just want to add that if you're struggling to get through to financial aid by phone (I spent 3 hours on hold last week), I found this service called Claimyr that got me through to a real person at Federal Student Aid in 10 minutes. Saved me so much frustration! Check out their demo video at https://youtu.be/TbC8dZQWYNQ or their website claimyr.com. They helped me get all my loan questions answered when I was super confused.

Quick tip: Save a copy of your MPN after you sign it! I thought I could just access it later but when I needed to reference it, I had to go through this whole process to get another copy. Also, your school might require you to do loan counseling EVERY year, not just the first time. Mine does and it's annoying but mandatory.

BEWARE OF THE AGGREGATE LOAN LIMITS!!!!! Nobody told me about this when I started. There's a maximum amount you can borrow for your ENTIRE degree with federal loans. If you max out early (like I did) you might have to take private loans later or worse - DROP OUT! For dependent undergrads it's $31,000 total with no more than $23,000 in subsidized. Plan your borrowing strategically!!

That's correct about the loan limits. As a first-year dependent undergraduate student, your annual limit is typically $5,500 (with up to $3,500 subsidized). This amount increases slightly for future years, but the aggregate limit for your entire undergraduate degree is $31,000. This is why it's important to explore all grant and scholarship opportunities to minimize your loan borrowing. Also, when you accept your loans in the portal, you can often accept less than the full amount offered. Just because they offer $5,500 doesn't mean you need to take it all. Calculate your actual expenses and borrow only what you need.

One last important thing about Direct Loans: they offer income-driven repayment plans after you graduate. This means your monthly payments will be based on your income, not the loan amount. This is a huge safety net that private loans don't offer. If you're working in public service after graduation, you might also qualify for Public Service Loan Forgiveness (PSLF) after 10 years of payments. These federal benefits make Direct Loans much safer than private alternatives.