Federal Direct Student Loan Program
The Federal Direct Student Loan Program (Direct Loan Program) consists of what are generally known as Stafford Loans (for students) and PLUS Loans (for parents). If you borrow from the Direct Loan program, the federal government provides funds for these loans.
The Direct Loan Programs provide long-term, low-interest loans to students and parents.
There are several distinct types of loans:
1. Subsidized Stafford Loans, which are made to undergraduate, graduate, or professional students who demonstrate need. The federal government pays the interest during periods when repayment is not required:
- While the student is still in school at least half time (as determined by the school)
- During the grace period before the loan enters repayment
- During periods when the loan is in a deferment status
2. Unsubsidized Stafford Loans, which are made to undergraduate, graduate, or professional students who do not demonstrate need. The student is responsible for payment of all interest that accrues from the date of the first disbursement throughout the life of the loan. Repayment of principal is not required while the borrower is enrolled at least half time in school or while the loan is in a grace or deferment period. However, interest continues to accrue and may be either paid as it accrues or capitalized (that is, added to the loan's principal balance).
3. PLUS Loans, which are loans made to parents of dependent students and to graduate and professional students.
For information about interest rates, annual loan limits, and origination fees, either check with your financial aid office or visit the Federal Student Aid website.