Federal Direct Loan Program (FDLP)

The U.S Department of Education runs two programs for federal student loans:

  • The William D. Ford Federal Direct Loan Program is the largest federal student loan program. Under this program, the student borrows money directly from the U.S. Department of Education.
  • The Federal Perkins Loan ProgramThis is a school-based loan program for undergraduate and graduate students with exceptional financial need. Under this program, the student borrows money from the school. For more information about this program, it is a good idea contact the school’s financial aid office directly.

Types of loans available under the Willia D. Ford Federal Direct Loan Program

Direct Subsidized Loans

moneyTo obtain this loan, the student must demonstrate financial need.

Direct subsidized loans are available for eligible undergraduate students who need help to pay for the costs of higher education at college or career school that participates in the Direct Loan Program.

You must be enrolled at least half-time at school to qualify to apply for a direct subsidized loan.

In most cases, only students enrolled in a program that leads to a degree or certificate awarded by the school will be approved for a direct subsidized loan, but there are certain exceptions.

How much can I borrow?

It is up to your school to determine how much you may borrow, as long as the amount does not exceed your financial need. Your financial needs are determined by your financial situation and the cost of tuition. If you own stocks are other financial instruments you might be forced to sell these before you can qualify for aid.  Speculative financial instruments such as binary options, Forex certificates and  CFD:s are usually not consider assets and will not affect your perceived financial need.

How much interest do I pay while I’m still in school?

For a direct subsidized loan, the U.S. Department of Education will pay the interest for you while you study, provided that you fulfill certain requirements. One of these requirements is that you must be enrolled at least half-time at school.

When you leave school, the department will continue to pay the interest for you during a 6 month grace period. (Important: This is not true for loans first disbursed between July 1 2012 and July 1 2014.)

Direct Un-subsidized Loans

To obtain this loan, the student doesn’t have to demonstrate financial need.

student loanDirect un-subsidized loans are available for eligible undergraduate, graduate and professional students at schools that participate in the Direct Loan Program.

You must be enrolled at least half-time at school to qualify for a direct un-subsidized loan.

In most cases, only students enrolled in a program that leads to a degree or certificate awarded by the school will be approved for a direct un-subsidized loan, but there are certain exceptions.

How much can I borrow?

It is up to your school to decide how much you can borrow, based on your cost of attendance and the size of any other financial aid that you are receiving.

How much interest do I pay while I’m still in school?

Since this is an un-subsidized loan, the U.S. Department of Education will not pay the interest for you while you study.

If you don’t make interest payments while you are still in school, the interest will be added to the principal amount of your loan. This is also true for interest payments not made during grace periods, deferment or forbearance (when you are still in school or afterwards).

Direct PLUS Loans

This loan can be used to cover education costs not covered by other financial aid.

Direct PLUS Loans are available for eligible graduate students and professional students. It is also available for parents of dependent undergraduate students.

Direct Consolidation Loans

With a direct consolidation loan, you combine all of your eligible federal student loans into a single loan with a single loan servicer.