Direct Loans – For Education
Direct loans
are usually used by students as loans for their education, and the loans are obtained either
directly by the students themselves or by their parents. These loans are made possible by the
federal government as they strive to help students get the education they deserve, want and need.
The federal government has set up four different loan programs that can be used for a
direct loan, each one with different circumstances. The first such loan is a Federal Direct
Stafford/Ford Loan, which is also sometimes called a Direct Subsidized Loan. With this type of
loan, you are not charged interest at least half of the time you are in school, during a grace
period, and during payment deferments. However, only those with a specific financial need qualify
for this loan. A Federal Direct Unsubsidized Stafford/Ford Loan, also called a Direct Unsubsidized
Loan, has the opposite circumstances. The federal government charges you interest on this loan
which is available to everyone, no matter their financial need.
A Federal Direct PLUS Loan is a loan parents can obtain for their dependent students, but the
parents must have unfavorable credit in order to obtain this loan. For the purposes of this type
of loan, a dependent student is defined as one that has not reached the age of twenty-four, is not
married and doesn't have dependents, is not an orphan or ward of the court, is not a veteran, and
is not a graduate or professional student.
Going in a different direction, when other loans haven't proven to be what you want, a Federal
Direct Consolidation Loan can be used. One or more of the other federal loans can be combined into
this new loan, with only one payment then going out to the U.S. Department of Education monthly.
Whatever your circumstances as a student or parent, there is a federal loan that seems to be
created for you.
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Loan Types
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Direct Loans
