Direct Student Loans

Direct Student LoansDirect Student Loans are just another name for federal student loans. Before President Obama restructuring of the federal student loan program, many federal loans were funded by third parties, meaning that a large bank would provide the students with their loan funds, and students would repay the federal government in turn. When this was in effect, direct student loans were federal loans that were given out directly by the federal government without a financial institution acting as middleman. Since the restructuring of the program, all federal loans may be considered direct student loans, as funding for all federal loans comes directly from the Department of Education.


The greatest benefit of Federal Direct student loans is that they have a generally low rate of interest. In the case of Direct Stafford Loans,the generous and flexible repayment terms allow students to navigate the process of paying down their debt with greater ease after graduation.

Applying for Direct Student Loans

In order to apply for Direct Student Loans, you need to fill out the Free Application for Federal Student Aid, or FAFSA. It is also very important to understand all the terms and conditions before applying for these loans so that you can maximize your chances of availing these financial aids. Remember, when borrowing money for college, look to federal loans first after looking for grants and scholarships; after that, if you exhaust your federal loan options, you can turn to private student loans as a last source of funding.