5 Benefits of Direct Student Loans

There are many options for financial aid for students, and one of the most popular choices is a direct student loan from the U.S. government. If you are seeking financial assistance for your academic career, here are five benefits of direct loans to consider.

1. The Federal Government is the Lender

The money for a direct student loan comes directly from the government via the U.S. Department of Education. This means that your loan is guaranteed by the government. It is highly unlikely that you won't receive your money, even in an economic downturn, because the government will almost certainly still be able to pay you. Also, since the money comes from the government, you don't need to worry about finding a lender, such as a bank or credit union, by yourself.

2. You Can Choose a Repayment Plan

With a direct loan, you will have a choice of repayment options. There are four payment plans; standard, extended, graduated and income-contingent. Payments and the amount of time you have to complete repayment vary with each plan. With these different options, you can choose which plan best suits your situation.

3. No Payment While Enrolled at Least Half-Time

As long as you are enrolled as a student with at least half-time status, you will not need to begin repaying your loan. In other words, no matter how long it takes you to graduate, you won't have to start shelling out money as long as you are taking a requisite number of courses per term.

4. Eligibility is Easy

With the exception of the PLUS Loan, which is a direct loan made to the parents of a student, there are no credit checks to pass when applying for a direct loan. Since most undergraduates are quite young and don't have much or any credit history, the government will not run a credit check on you or inquire into your personal financial history.

5. Consolidation is an Option

If you have more than one student loan, the government will allow you to consolidate those loans when it comes time to start repaying. This process basically turns all your individual loans into one loan, so you don't have the hassle of keeping up with multiple payments and terms. Consolidation can make your monthly payments lower, and may extend the length of time you have to repay, sometimes up to thirty years.

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