Federal Direct Loans include the subsidized and unsubsidized Stafford loan for undergraduate students, Plus loans for parents and graduate students, and consolidation loans for parents and students.  In order to borrow a federal direct loan, students must first complete the FAFSA or Free Application for Federal Student Aid.  Once the student has completed and submitted the FAFSA, the prospective college will put together a financial aid package outlining the total financial aid award the student is eligible to receive.

There are two different types of Federal Direct Loans available for students, which include the Stafford Loan and the Plus Loan.  The subsidized Stafford Loan is based on financial need, while the unsubsidized Stafford Loan in based on the student’s willingness to borrow funds to pay their college expenses.  The Graduate Plus Loan is for students that are obtaining a graduate or professional degree, while the Parent Plus Loan is for parents of undergraduate students borrowing to help pay their child’s education expenses. 

In order to determine if a student qualifies for a Federal Direct Loan, he or she must complete the FAFSA application.  The FAFSA calculates how much the student’s family is able to contribute to their education.  If it is determined that the student’s family will not be able to contribute the full cost of the prospective school then the student is eligible to receive a Federal Direct Loan.

Within the Federal Direct Loans Program, students are able to consolidate one or more Federal Direct Loans into one consolidated loan at a fixed interest rate and for a more favorable term.  Students have multiple options when deciding the payment term.  Students are allowed to complete one loan consolidation per loan, so if he or she completes a loan consolidation now he or she may not request for another loan consolidation for the remaining life of the loan.

ParentLoan.org / PrivateSchoolLoans.org / PrivateCollegeLoan.org