Federal Direct Student Loan

Like the Federal Family Education Loan Program (FFELP), the Federal Direct Student Loan Program (FDSLP) includes (Direct) Stafford Loans (subsidized and unsubsidized), (Direct) Parent Loans for Undergraduate Students (PLUS) and Direct Consolidation Loans.

If you decide to borrow money to help pay for a college education, the U.S. Department of Education offers the Direct Loan programs. You can borrow money directly from the federal government. The funds are disbursed through the school. Student have  to deal with  the U.S. Department of Education.  Students can select the repayment plan that is right for their personal financial circumstances and change repayment plans if their financial circumstances change.

There are four types of Direct Loans :

1. Federal Direct Subsidized Loan : also called Direct Subsidized Loans. If you have a subsidized loan, the federal government does not charge you interest while you're in school at least half time, during your grace period, and during (postponements of repayment). You must show financial need to receive this type of loan.

2. Federal Direct Unsubsidized Loan :also called Direct Unsubsidized Loans. The federal government charges you interest on these loans while you're in school, in your grace period, or in deferment. You can get this type of loan regardless of financial need.

3. Federal Direct Consolidation Loan :Direct Consolidation Loans are designed to simplify loan repayment by allowing you to combine several federal student loans into one. Consolidation Loans. Direct Consolidation Loans may: 1) simplify the repayment process; 2) gain you additional deferment possibilities; and 3) allow you to take advantage of all of the Direct Loan repayments plans.

Federal Direct PLUS Loan :for parents without adverse credit histories who want to borrow for their dependent students.

If you are a dependent, undergraduate student, you may borrow up to:

• $2,625 if you're a first-year student enrolled in a program of study that is at least a full academic year.
• $3,500 if you've completed your first year of study, and the remainder of your program is at least a full academic year.
• $5,500 a year if you've completed two years of study, and the remainder of your program is at least a full academic year.

If you are an independent undergraduate student or dependent student whose parents are unable to get a PLUS Loan, you may borrow up to:

• $6,625 if you're a first-year student enrolled in a program of study that is at least a full academic year. (At least $4,000 of this amount must be in unsubsidized loans.)
• $7,500 if you've completed your first year of study, and the remainder of your program is at least a full academic year. (At least $4,000 of this amount must be in unsubsidized loans.)
• $10,500 a year if you've completed two years of study, and the remainder of your program is at least a full academic year. (At least $5,000 of this amount must be in unsubsidized loans.)

If you are a graduate student, you can borrow up to $18,500 each academic year. The total debt you can have outstanding from all Direct and FFELP Loans combined is:

• $23,000 as a dependent undergraduate student;
• $46,000 as an independent undergraduate student;
• $138,500 as a graduate or professional student.

The interest rate for Direct Loans first disbursed on or after July 1, 1994, is variable but will never exceed 8.25 percent. The interest rate is adjusted each year on July 1. You'll be notified of interest rate changes throughout the life of your loan.