Direct student loans are considered to be federal student loans. Such loans can be offered to students. Direct student loans are provided with the help of the college or university financial aid office. One can say that such loans can be used as an additional source of a student to pay for college or they can be used together with other programs like work-study, scholarships, or even grants.
There are two types of such loans: subsidized and unsubsidized loans. Both types can be offered to the student either through a bank or other lending agency. Moreover, almost every student is able to receive a direct student loan. You should know that the loan should be paid after six months when the student graduates or he or she is a half time student. The average amount of the direct student loan is about $5,500 per year for freshman students, $6,500 per year for sophomores and $7,500 for juniors and seniors in undergraduate school. These amounts are considered to be for dependent student. As for independent students, they have higher limits on direct student loans, i.e. $9,500 per year for freshmen to $10,500 per year for sophomores and $12,500 per year for juniors and seniors. Generally, the federal government pays for the interest while the student is still in school.
In order to be eligible for direct student loans, a student should be a U.S. citizen, national or a person who stays in the United States not on temporary basis. Also he should be a full-time student or at least a half-time as an undergraduate, graduate, or professional student at a participating postsecondary school. Usually, a student is eligible for loans during a single twelve-month period.
If a student is dependent, then his parent can apply for the Direct PLUS program. To receive a direct subsidized loan, the borrower should go through a financial need analysis in order to define eligibility for Federal interest. During studying, a student has to maintain satisfactory academic progress.
It is very important that a student pays the debt on time and the full amount as in case of missing the payment it can negatively influence on the student’s credit report. But it is possible to receive the deferment on a direct student loan because of certain circumstances, i.e. if a student had to earn an associated degree and wanted to obtain a bachelors degree.
If you need some extra information, visit: http://www.ed.gov/offices/OSFAP/DirectLoan/index.html