Are you struggling to find out how to pay for college? Is money the primary reason why you can’t continue your studies? If the answer is yes, now you can stop worrying. The William D. Ford Federal Direct Loan Program, also called FDLP, direct student loans or direct loans, may help you! As prospective students, however, they may be unacquainted with the information.

Direct loans, available to students and parents, are low-interest loans which help them pay for the education expenses after high school. As these loans are government issued, the lender is accordingly the U.S. Department of Education rather than a bank or other financial institutions. However, the loan servicer or the entity you deal with can be a private business.

With federal direct student loans, students can borrow directly from the federal government through a single contact (usually called loan servicer) for everything in connection with the repayment of their loans, even though they receive these loans at different schools. The direct loan account information can be accessed online through the servicer’s website. Best of all, there are several repayment plans designed to cater to the needs of almost all borrowers. If borrowers’ needs change, they can even modify repayment plans.

Are you in dire need of a direct student loan? There are several options available to you. Before opting for a loan plan, it is important to fully understand your option and select a loan that meets your financial needs.

1. Direct Subsidized LoansThis type of direct student loans is available to students with demonstrated financial needs, with the availability depending on federal regulations. There is no interest charged while borrowers are enrolled in school at least half-time, during the grace period and during deferment periods. After all these periods, an interest rate applies.
2. Direct Unsubsidized LoansUnlike subsidized loans, these loans don’t require financial needs. However, interest is charged during all periods, even when students are in school and during grace and deferment periods. Be noted that both of these two direct loans have a 6-month grace period. The interest rate for them is also identical and currently fixed at 6.8%.
3. Direct PLUS LoansDirect PLUS loans are unsubsidized and intended to help the parents of dependent students and graduate / professional students. These loans cover the borrower’s education expenses up to the cost of attendance deducting all other financial assistance. Borrowers will be charged a fixed interest rate of 7.9% during all periods, beginning on the date of your loan’s first disbursement. Be noted that there is no grace period applied to such a loan. However, this type may have the highest borrowing limit, compared to the above two direct loans.
4. Direct Consolidation LoansDirect Consolidation Loans are actually not a loan. They are formed by the combination of all eligible federal student loans. That is to say, if you take out multiple federal student loans, you can combine them into a direct consolidation loan to make a smaller payment.

No matter which direct loan you take, the loan disbursement is almost the same. In general, the loan will cover your education expenses (such as tuition, room, materials, transportation and other education-related fees) for a full academic year. Your school is responsible for making disbursements to you, usually in no less than 2 disbursements (e.g. at the beginning of each semester or quarter or at the beginning and midpoint of your academic year).

As is often the case, your loan funds will be deposited to your school account to pay tuition, room, materials and other related charges. If the loan disbursement amount is more than your school charges, the remaining balance of the disbursement will be paid to you directly by check or through other ways.

In some instance, however, the school may disburse some of the PLUS loan money directly to the borrower. Generally, your school will ask you to note down the loan money disbursed to you each time. They will also offer the information about how to cancel all or part of your disbursement if you find yourself in no need of the money. Additionally, the federal government will also send you a notice about the confirmation of the disbursement. Make sure to read and keep all correspondence received regarding your loan.

To learn more about student loans and scholarships please visit: www.weird-scholarships.org