Federal Direct Student Loan Program

The formal definition of a federal direct student loan is a low-interest loan for students and parents which is used to help pay for the cost of any form of education after high school. The lender for the federal direct student loan is the U.S. Department of Education rather than an institution such as a bank.

Federal direct student loans have a number of characteristics which make them a popular loan to request. These include:

  • Easy to handle - These loans are borrowed from the federal government without any intermediary organization, which creates a single contact with regards to repaying loans, even if you receive them at multiple schools.
  • Accommodating - Interested in accessing your account at 2am on Sunday? No problem! You'll have access to your federal direct student loan account information 24 hours a day, 7 days a week.
  • Manageable - You have the option to choose from multiple repayment plans which are created to meet the needs of virtually any borrower, and you can easily change your repayment plan if you need to do so.

Types of Federal Direct Student Loans

  • Subsidized Stafford Loans are for those students who have significant financial need which has been determined by the federal government. If you are in school at least half-time, then no interest is charged on your loans during your grace period as well as during deferment periods.
  • Unsubsidized Stafford Loans are not based on financial need and interest is always charged on these federal direct student loans.
  • PLUS Loans are low-interest loans for graduate/professional students as well as parents who want to help their dependent student-children meet their college costs.
  • Federal Direct Consolidation Loans provide the opportunity for students or parents to take a number of different federal direct student loans and combine them into one loan, which supplies the loan holder with a single monthly payment.