Federal Direct Loans are student loans that are provided to the student directly from the U.S. Department of Education. For the most part, any student loan distributed after July 1, 2010 is a federal Direct Loan. There are four types of loans offered under this program:
Stafford Loans are loans available to undergraduate students on the basis of financial needs. These types of loans are broken down into two different types: Direct Subsidized and Direct Unsubsidized Loans.
Aggregate loan limits are the maximum amount of federal student loans that the Department of Education will let a student borrow for their undergraduate and graduate study. Once the maximum amount is reached, the student will no longer receive financial assistance from the government. To complete their degree, the student will have to seek additional assistance through the use of personal loans.
Interest rates for undergraduate students are fixed at 5.05% for the entire life of the loan.
The interest rates for graduate students with unsubsidized Stafford Loans, are fixed for the life of the loan, but are a bit higher: 6.60%.
Federal student loans for graduate or professional students and parents of dependent undergraduate students. There are two kinds.
Both PLUS loans are available regardless of financial need, but credit checks are required. Cosigners can be used on these loans to cover a credit deficiency, if required. Interest rates for Direct PLUS loans first disbursed on or after July 1, 2023, and before July 1, 2024: 8.05% The loan disbursement fee (for loans dispersed on or after 10/1/20 and before 10/1/24) is 4.228% of the total loan.