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Federal Direct Loan Program
Explanation:
The mechanism through which the federal government lends money to students and parents for educational costs after high school. While the government serves as the lender for this program, private companies act as intermediaries and service the loans.
Federal direct student loans can either be subsidized or unsubsidized, depending on the particular applicant's level of financial need. Interest rates vary depending on whether the loan is subsidized or not as well as whether it is for an undergraduate student, a graduate student, or the parents of a dependent undergraduate student.
There are a number of different repayment plans that federal direct student loan recipients can choose from, including a fixed monthly payment, a graduated plan where the monthly payment amount increases over time, and a plan where the amount of one's payment is based on their income.