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These direct loans vary in criteria and repayment schedules:
• The Federal Direct Subsidized Stafford/Ford Loan is a direct loan, which means you do not pay the interest on the loan while you are school at least part-time. This particular type of Direct loan is based on the student financial need in accord with federal regulations.
• The Federal Direct Unsubsidized Stafford/Ford Loan is a direct loan the government charges you interest while you are in school. The student does not need to be in extreme financial need to receive this type of loan.
• The Federal Direct PLUS loan is a direct loan designed for parents without an adverse financial history who wish to borrow money for their dependent student. In order for a student to be dependent he or she may not be 24 years or older, a graduate or professional student, someone with legal dependents, an orphan or a ward of the court. Parents of independent students are not eligible to apply for this type of loan.
• The Federal Direct Consolidation loan is a consolidation of one or more federal loans combined into a direct loan. A single monthly payment is made to the U.S. Department of Education. It is to the student's advantage to consolidate, due to lower interest rates.
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Direct Loans 101