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Direct Student Loans - A Helping Hand
from:Direct student loans, also known as direct loans, are monitored
by the William D. Ford Federal Direct Loan Program. These direct
student loans are designed to help students that have graduated
from high school and are continuing their education in colleges,
universities or trade schools. Direct student loans are part of
the Federal Student Aid program of the Department of Education
and are not offered through private lenders or companies. The
loan agreement is between the student and the Department of
Education, without any agencies in the middle.
Students that want to apply for direct student loans must
complete a FAFSA or Free Application for Federal Student Aid
over the internet and submit all required information and
documentation. In addition each student will also have to
complete a MPN or master promissory note. This is the document
that is the legally binding contract between the student and the
Department of Education with regards to how the loan will be
repaid as well as the specific terms and conditions of direct
student loans. There is additional information available through
the Department of Education website that details and fully
explains all the terms and legal clauses in the master
promissory note.
To be eligible for direct student loans the school must be part
of the direct loan program and the student must be enrolled at
least part-time. Not all students will receive subsidized direct
loans, some will be unsubsidized. Typically students with very
few resources and with greater financial needs will qualified
for subsidized loans, which means that no interest will be
charged on the loan while the student is in school or during the
grace period or any deferment time.
Students that are dependent, or have parents that are able to
help pay for schooling are eligible for lower direct student
loans than students that are considered independent. Independent
students may be students that have families of their own to
support, have no living parents to assist with educational
funding or students that are otherwise without financial
support. Graduate students can also apply for direct student
loans under the same criteria as applying for a Stafford loan,
with some of this total possible being subsidized. Typically
graduate direct loans have a limit on the total amount of the
loan that can be provided interest free during school, grace
periods and deferments.
Direct student loans have a fixed interest rate that is set
every July 1st. These loan rates have a cap however there is
also a loan fee that can be up to 4% of each direct loan. This
fee is used to offset the cost of the program for future
students.
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About the author: Thomas Iturriaga
Are you interested in being prepared before meeting with your bank manager or loan officer? Your best bet is to read 'The World of Loans Explained' and go in there prepared to: get approved and get a great interest rate! Get more information regarding loans - http://Loans-Online-Guides.info
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