The U.S. Department of Education’s federal student loan program is the William D. Ford Federal Direct Loan (Direct Loan) Program. Under this program, the U.S. Department of Education is your lender. The available options under this program are:
Direct Subsidized Loans
Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education.
Direct Unsubsidized Loans
Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need. Graduate and professional students may be eligible to receive up to $20,500 per academic year, according to the cost of attendance. Qualified medical students enrolled in an accredited program, may be eligible to receive a maximum of $40,500 in Unsubsidized Loan per academic year.
Direct Loan-Plus Graduate Loan
Direct Loan-Plus Graduate Loan is a low fixed-interest loan for graduate and professional students to cover their cost of attendance. The Graduate Plus Loan requires a credit verification.
All loan programs have fixed interest rates and origination fees. As part of the application process, you must submit a master promissory note on line, and complete an electronic entrance counseling at https://studentaid.gov/.
Important consideration when taking out federal student loans
Before you take out a loan, it’s important to understand that a loan is a legal obligation that makes you responsible for repaying the amount you borrow with interest. Even though you don’t have to begin repaying your federal student loan right away, you shouldn’t wait to understand your responsibilities as a borrower. Be a responsible borrower.
- Keep track of how much you're borrowing. Think about how the amount of your loans will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate, so it’s important not to borrow more than you need for your school-related expenses.
- Research starting salaries in your field. Ask your school for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate.
- Understand the terms of your loan and keep copies of your loan documents. When you sign your promissory note, you are agreeing to repay the loan according to the terms of the note even if you don’t complete your education, can’t get a job after you complete the program, or you didn’t like the education you received.
- Make payments on time. You are required to make payments on time even if you don’t receive a bill, repayment notice, or a reminder. You must pay the full amount required by your repayment plan, as partial payments do not fulfill your obligation to repay your student loan on time.
- Keep in touch with your loan servicer. Notify your loan servicer when you graduate; withdraw from school; drop below half-time status; transfer to another school; or change your name, address, or Social Security number. You also should contact your servicer if you’re having trouble making your scheduled loan payments. Your servicer has several options available to help you keep your loan in good standing.