Direct Student Loans are part of a federal government loan program, called the William D. Ford Federal Direct Loan Program, that lends money to students to help them pay for their college educations. Unlike other federal loan programs, the federal government is your lender. Really, the United States Department of Education through the Office of Student Aid is your lender. Because you are receiving your loans straight from the government, you get good interest rates and favorable loan terms compared to other types of student loans.
Types of Direct Student Loans- Stafford Direct Student Loans: Stafford Direct Student Loans are loans given directly from the federal government to students to help them pay for college. There are two different types of Stafford Direct Student Loans: subsidized and unsubsidized. Subsidized Direct Student Loans are given to students who demonstrate financial need, and they do not require interest payments ("Stafford Loans"). On the other hand, any college student can get Unsubsidized Direct Student Loans regardless of need, and interest must be paid. The amount you can borrow depends on what year of school you are in and whether your loans are subsidized or unsubsidized.
- PLUS Direct Student Loans for Parents: PLUS Direct Student Loans for Parents are loans given directly from the federal government to the parents of undergraduate students to help them afford paying their child's tuition. The amount of money you can receive from PLUS Direct Student Loans depends on how much money you still need after receiving other student aid. With a PLUS Direct Student Loan, you should be able to get the amount of money needed to bridge the gap between the cost of attendance and the student aid you have already received ("PLUS Loans"). One difference to keep in mind about PLUS Direct Student Loans is that, unlike Stafford Direct Student Loans that start repayment after graduation, PLUS Direct Student Loans start repayment immediately ("PLUS Loans").
How to get Direct Student Loans To receive Direct Student Loans, you must complete and submit a Free Application for Federal Student Aid, also known as a FAFSA ("Stafford Loans"). That one application, which can be submitted online, applies you for all the student aid programs offered by the federal government, including the Direct Student Loan programs. After you submit the application you will receive an award letter, informing you of the student loans you are eligible for ("Stafford Loans"). At that time you will know if you are qualified for Stafford Direct Student Loans. If your award letter doesn't provide you with enough student aid, you can then apply for PLUS Direct Student Loans for Parents if your school supports the program ("PLUS Loans"). The financial aid office at your school will have an application and promissory note for your parents to fill out and sign. If your parents pass a credit check and are approved, then you will be able to get a PLUS Direct Loan ("PLUS Loans").
Direct Student Loans are a great option for funding your college education. Whether Stafford or PLUS, the Direct Student Loans have good terms and fair interest rates. If you are interested in learning more about Direct Student Loans and other education loans, read our
Student Loan Guide. There you will find detailed information about the different types of student loans and how to apply for them. Direct Student Loans are just one of your many options for paying for a college education.
