Federal Direct Loan Program
Federal Direct Loans are federally backed student loans that enter repayment six months after the student graduates from college or s/he ceases to be enrolled as at least a half-time student. Students must file the FAFSA in order to establish eligibility for Direct Loans.
Direct Loans are low-interest loans for students and/or parents to help pay for the cost of a student's college education. The lender is the U.S. Department of Education rather than a bank or other financial institution.
With Direct Loans you:
- Borrow directly from the federal government and have a single contact, the Direct Loan Servicing Center, for everything related to the repayment of your loans, even if you receive Direct Loans at different schools;
- Have online access to your Direct Loan account information 24 hours a day, 7 days a week at Federal Student Loan Servicing;
- Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.
- All direct loans are submitted to NSLDS (National Student Loan Database System) and accessible by authorized agencies, lenders, and institutions.
Types of Direct Loans
The following Direct Loans are made through the William D. Ford Federal Direct Loan (Direct Loan) Program, which is administered by the U.S. Department of Education:
- Direct Subsidized Loans are for students with demonstrated financial need, as determined by federal regulations (FAFSA). No interest is charged while a student is in school at least half-time, during the grace period and during deferment periods. During the 6-17 academic year this loan will disburse with a 3.76% fixed interest rate.
- Direct Unsubsidized Loans are not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. During the 6-17 academic year this loan will disburse with a 3.76% fixed interest rate.
- Direct PLUS Loans are unsubsidized loans for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods. During the 6-17 academic year this loan will disburse with a 6.31% fixed interest rate.
Federal Perkins Loans
The Federal Perkins Loan Program is a limited availability, need-based federal loan program. To qualify, you must file a FAFSA and utilize your full Federal Direct Unsubsidized Stafford Loan eligibility each year. It has a fixed interest rate of 5%, and is currently being phased out as a financial aid option by the Department of Education.