Applying for aid
As with all federal student aid, you apply for Direct Loans by filling out the Free Application for Federal Student Aid (FAFSA). Most students use FAFSA on the Web to complete their applications. The information on your FAFSA is transmitted to the schools that you list on the application, and those schools use the information to assess your financial need for student aid.
The award package
Direct Loans are generally awarded as part of a larger "award package ," which may contain other types of aid as well, to help you meet the costs of going to college or career school.
The Direct Loan Program offers the following types of loans:
- Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods.
- Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.
- PLUS: unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
- Consolidation: Eligible federal student loans can be combined into one Direct Consolidation Loan.
Student borrowers are not required to begin making payments until after they drop below half-time attendance. See When you graduate or leave school for more information.
Your school will tell you how much you may borrow and the types of loans you are eligible to receive. The information below will give you an idea of how much you may be eligible to receive.
Note: PLUS loan borrowers cannot have an adverse credit history (a credit check will be done).
Accepting a loan
Your school will notify you of the loan amounts that it is offering, usually in an "award letter" that lists all of your
proposed financial aid awards (your award package).
You should evaluate the aid offer carefully. In the case of loans, keep in mind that whatever amount you borrow must be paid back with interest. If your living expenses are not as high as the standard allowance projected by your school, you may not have to borrow as much as the amount in the award letter.
To get an idea of your monthly loan payments after you graduate, take a look at our repayment calculator .
To get an idea of your college expenses, use our budget calculator .
You have the right to decline the loan or to request a lower loan amount. In the award letter your school will tell you how to do this.
Credit check & endorser alternative
When you apply for a Direct PLUS Loan, the Department will check your credit history. To be eligible to receive a PLUS Loan, you must not have an adverse credit history. If you are determined to have an adverse credit history, you may still receive a Direct PLUS Loan if you obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay the loan. If you are a parent borrowing on behalf of your dependent student, the endorser may not be the student on whose behalf you (the parent) obtain a Direct PLUS Loan. In some cases, you may also be able to obtain a Direct PLUS Loan if you document to our satisfaction that there are extenuating circumstances related to your adverse credit history.
The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade level and on whether you are a dependent student or an independent student. The following table shows the maximum amount of money you may borrow each academic year in Direct Subsidized and Unsubsidized Loans as well as the total or aggregate amount you may borrow:
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