Direct Loans 101
By
John Williams
Direct
loans are convenient, flexible and simple. A Direct loan is a loan by a
lender to a customer without the use of a third party. This type of
loan enables the lender to have greater discretion in the distribution
of loans. Typically 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
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 the government charges you interest while you are in school. The
student does not need to be in extreme financial need to receive this
type of loan.
• 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. 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.
About the author:
Check out the direct loans blogger at http://directloans.blogspot.comHe reviews direct loans and interprets complicated financial data into simple to understand language.
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