What are Direct Loans?

Direct Loans are federal student loans provided by the U.S. Department of Education to help cover the cost of college or career school. These loans are obtained directly from the federal government, as opposed to private lenders. Direct Loans have various types, including subsidized and unsubsidized loans, PLUS loans for parents, and Direct Consolidation loans. Subsidized Direct Loans are need-based, with the government covering the interest while the borrower is in school, during the grace period, and certain deferment periods. Unsubsidized Direct Loans are not need-based and accrue interest throughout the loan term. With Direct Loans, students can borrow directly from the government, with interest rate and repayment terms generally more favorable compared to private loans. The repayment plans can be customized based on the borrower's income, providing flexibility after graduation. Direct Loans serve as an accessible and affordable option for students pursuing higher education.