Direct Loans

Direct loans are low interest, convenient, flexible and simple. The lender is the U.S. Department of Education rather than a bank or financial institution. The federal government provides four types of direct loan financing.

These direct loans vary in criteria and repayment schedules:

The Federal Direct Subsidized Stafford/Ford Loan is a direct loan, which means you do not pay the interest on the loan while you are in school at least part-time. This particular type of direct loan is based on the student financial need in accord with federal regulations.

The Federal Direct Unsubsidized Stafford/Ford Loan is a direct loan which is charged interest by the government while the student is in school. The student does not need to be in extreme financial need to receive this type of loan. In order to receive the direct loans, you must be enrolled at least half time, and you must meet the general eligibility requirements for the Federal Student Aid Programs by completing the FAFSA. The maximum a student can borrow each school year depends on the students grade level and other factors. The school will disburse the loan money to the student’s account and is usually disbursed in two installments Direct Subsidized and Direct Unsubsidized loans have a 6 month grace period that starts the day after the student graduates, leaves school, or drops below half-time enrollment. The student does not have to make payments until the grace period ends. The federal government offers four repayment plans. The student can change plans at any time and there is no pre-payment penalty. For more detailed information students may contact Borrower Services at the Direct Loan Servicing Center at 1-800-848-0979 or visit Direct Loans on the Web at

The Federal Direct PLUS loan is a direct loan designed for parents without an adverse financial history who wish to borrow money for their dependent student. Parents can borrow up to the cost of attendance. The interest rate is fixed and charged during all periods beginning the date of disbursement. In addition to interest, you pay a loan origination fee that is a percentage of the principle amount of each Direct Plus Loan that you receive. This fee helps reduce the cost of making these low interest loans. The fee is deducted before you receive any loan money, so the amount you receive will be less than the amount you have to repay.

The school will disburse the loan money by crediting to your student’s account; any additional money will then go directly to you. Loan money will usually be disbursed in at least two installments. Parents have the option to postpone repayment until 6 months after the beneficiary student leaves school or drops below half-time enrollment. If payments are postponed, interest will accrue and be capitalized on the unpaid loan balance. PLUS Loans generally must be repaid within 10 years. A Parent PLUS Loan may be discharged if the student for whom the loan was obtained dies. In order for a student to be dependent he or she may not be 24 years or older, a graduate or professional student, someone with legal dependents, an orphan or a ward of the court. Parents of independent students are not eligible to apply for this type of loan.

The Federal Direct Consolidation loan is a consolidation of one or more federal loans combined into a direct loan. A single monthly payment is made to the U.S. Department of Education. It is to the student’s advantage to consolidate, due to lower interest rates.

Direct loans give you the simplicity of having one contact for concerns with your financial assistance. You are able to have access to your direct loan information on-line 24 hours a day, 7 days a week. You are given the flexibility to choose your repayment options and are able to change your schedule as your needs change.


Federal Student Aid Information Center


TTY 1-800-730-8913

Student Aid on the Web

For repayment of your Direct Loans

Borrower Services at the Direct Loan Servicing Center


TTY 1-800-848-0983

Direct Loans on the Web


For Direct Consolidation Loans

Direct Loan Consolidation Center


Direct Loan Consolidation Website