What are Direct Student Loans?

Direct student loans are like regular loans, except the borrower is always funding an education and the lender is always the United States Department of Education.

It is up to a university or a college to decide whether or not to accept direct student loans. Applying for a direct student loan is as easy as simple as filling out a Free Application for Federal Student Aid, which can be done online.

There are three types of direct student loans, each with its own interest rate. Subsidized loans have no interest while a borrower is attending school or in a grace period. These are for people with monetary needs. Unsubsidized loans charge interest immediately and throughout the entire term of the loan.  These are not based on monetary needs. The third type of loan is for parents of students. These loans charge interest and cover attendance.

With all types of direct student loans, students do not have to start making payments until after they decrease their attendance to below half time. That amount that you are able to borrow depends on the number of years that you have spent getting a post-high school education. 

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