Federal Direct Student Loans

To provide loan capital directly from the Federal government to vocational, undergraduate, and graduate postsecondary school students and their parents.

The applicant must be a U.S. citizen, national, or person in the United States for other than a temporary purpose. A student borrower must be enrolled or accepted for enrollment in a degree or certificate program on at least a half-time basis as an undergraduate, graduate, or professional student at a participating postsecondary institution. An otherwise eligible student is eligible for loans during a single twelve-month period in which the student is enrolled in a non-degree/non-certificate course of study that the institution has determined is necessary in order for the student to enroll in a program leading to a degree or certificate. Under the Direct PLUS program, parents may borrow for dependent undergraduate students. Also, graduate and professional students are eligible to borrow PLUS Loans. Direct Unsubsidized and PLUS loans are available to eligible borrowers regardless of need. However, a financial needs test based on family income is required for an undergraduate student to receive a Direct Subsidized loan. A student that is presently enrolled at a participating institution must be maintaining satisfactory academic progress in the course of study that they are pursuing. The borrower may not owe a refund on any Title IV grant or be in default on any Title IV loan received for attendance at any institution. The borrower must also file a Statement of Registration compliance (Selective Service).

Vocational, undergraduate, and graduate postsecondary school students and their parents.

Applications for the Direct Subsidized and Unsubsidized loans are obtained from the institution. Direct consolidation loan applications are obtained from the Department of Education. To obtain a Direct Subsidized or Unsubsidized loan, a student shall complete and submit a Free Application for Federal Student Aid (FAFSA). All applications (with the exception of PLUS) for Direct Loans are processed by the Central Processor System (CPS) in the initial step to determine a student's Title IV eligibility. Institutions will receive official output from the CPS, and then will be able to assemble a financial aid award package. An institution participating in the Direct Loan program may award Direct Loans as part of the financial aid package. If a Direct Loan is not included in the aid package, a student may contact the institution to request loan information.

Institutions participate in the Direct Loan program either by originating loans or by using an alternative originator to originate loans. The institution must certify the borrower's eligibility to receive the funds. To obtain a Direct PLUS Loan, the parent completes an application and authorizes a credit check. If the parent does not have an adverse credit history, the loan may be disbursed. Institutions may disburse funds by crediting them directly to the student's account at the institution, issuing a check or cash, or by initiating an electronic funds transfer.