Direct Student Government Loans

Direct Student Government Loans What Is a Direct Student Loan? A direct student loan is a loan given directly to a student (or a student's family) to help with the cost of college. These loans come from several federal sources and in many cases have low interest rates (that--in certain cases--are fixed rates) and do not require a co-signor. All incoming or continuing college students who file the Free Application for Federal Student Aid form (commonly known as the FAFSA application) automatically apply for consideration for these loans. Related Articles What Does My EFC Code for Financial Aid Mean? What Does My EFC Code for Financial Aid Mean? How to Get a Student Loan Deferment How to Get a Student Loan Deferment Student Loan Forgiveness Program Student Loan Forgiveness Program Benefits of Direct Student Loans As the Federal Student Aid official website points out, there are several perks to direct student loans: Ease of use. You are borrowing from a single source rather than multiple sources. This is especially important in the event a student transfers schools (perhaps from a community college to a four-year institution). No credit check. Instead of being a loan from a financial lender, direct student loans come from the United State Department of Education and as a result, do not require a co-signor. Interest. In certain cases, direct student loans have fixed interest rates and interest is paid by the government while the student is in college. Payment options. There are multiple payment plans for students when the loans go into repayment and it is simple to switch between different options. Types of Direct Student Government Loans There are four main types of direct student loans given by the government to students or their families: Subsidized Stafford Loans Unsubsidized Stafford Loans PLUS Loans Consolidation Loans Subsidized Stafford Loans A Subsidized Stafford Loan is available to students who present financial need. Interest for these loans is not charged when the student is enrolled at least half-time. Interest is also not charged during the loan's grace period or any deferment periods. These loans are available through either the Direct Loan Program (DL) or through the Federal Family Education Program (FFEL). Both of these are programs through which the government allocates money for these funds.