Federal Student Loan Information

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The Federal student loan program is called the Direct Loan program. This is a low interest loan for students and parents to help pay for education beyond high school.

The loan is issued by the U.S. Department of Education directly, and there are no banks involved with these loans. Because you are borrowing directly from the federal government you will be able to administer everything to do with your loans using the Direct Loan Servicing Center. This makes it easier especially if you have multiple loans from different schools.

There are a number of types of loans that fall under the Direct Loan Program and there are some important differences that you should be aware of about how they charge interest.

The subsidized loan is for students that have a financial need determined by federal regulations. With this loan there are no interest charges while the student is in school at least half time. There is also no interest charge during the six month grace period following the completion or termination of classes, nor any deferment periods.

The unsubsidized loan is not based on financial need, and there will be interest charged as soon as the money is distributed. This means that even though you are not obligated to pay on the loan while in school, you will be charged interest during this period. You will also be charged interest during the six month grace period and any deferment periods.

The Plus loan is an unsubsidized loan for the parent of the student to help cover any educational costs not covered by any other financial assistance. Interest is charged during all periods for this type of loan.

There is also a Consolidation loan that combines any eligible federal student loans into one Direct Consolidation Loan. This has the advantages to lower your monthly payments by spreading you loan out over a longer term. While you will lower your monthly payment, you will pay more interest because of the longer term.

You can apply for any of the Direct Loans by filling out the Federal Student Aid application online. The information in the application is transmitted to the school you list in the applications and is used to determine all financial aid that might be available to the student.

There are no required payments due until the student falls below a half time status and there is also a six month grace period after graduation or termination in most cases. We will cover payment requirements and options in future articles.

Take advantage of up to date free Federal Student Loan Information and all other Student Loan Information by visiting GetStudentLoanHelp.com today.

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