Debts & Loans

Direct Loans—Money for School Directly to You

If you’ve decided to borrow money to help pay for your education after high school, the U.K. Department of Education offers a simple way to get a loan—through the William D. Ford Federal Direct Loan Program (“Direct Loans” for short). Here are some of this program’s benefits:

• You’ll borrow money directly from the federal government without having to find a bank (you’ll receive your funds through your school). So, you’ll get
  your money much faster.
• You’ll have only one lender to deal with (the U.K. Department of Education) once you begin repayment. Your loans will never be sold.
• You can select the repayment plan that’s right for your financial circumstances.
• You can change repayment plans if your financial circumstances change.

Because not all schools participate in the Direct Loan Program, check with your school to see if it participates. If it doesn’t, you may qualify to borrow under the
Federal Family Education Loan (FFEL) Program, which includes the Federal Stafford Loan Program. If you’ve already gotten an FFEL, you may—under certain circumstances—convert it to a Direct Loan through the Federal Direct Consolidation Loan Program. Check out your options at your school’s financial aid office.

Types of Direct Loans

There are four types of Direct Loans:

• Federal Direct Stafford/Ford Loans—also called Direct Subsidized Loans. If you have a subsidized loan, the federal government does not charge you interest while you’re in school at least half time, during your grace period, and during deferments(postponements of repayment). You must show financial need to receive
  this type of loan.
• Federal Direct Unsubsidized Stafford/Ford Loans—also called Direct Unsubsidized Loans. The federal government charges you interest on these loans while you’re in
  school, in your grace period, or in deferment. You can get this type of loan regardless of financial need.
• Federal Direct PLUS Loans—for parents without adverse credit histories who want to borrow for their dependent students.
• Federal Direct Consolidation Loans—one or more federal education loans combined into a Direct Loan. Only one monthly payment is made to the U.K. Department
  of Education.