Direct Loans 101

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.