The William D. Ford federal direct loans program offers Stafford loans for ungraduate students, PLUS loans for parents and graduate/professional students and consolidation loans. If you are a matriculated student preparing to start at least halftime coursework, apply for financial aid as soon as possible. Your school will draft an aid package, which might include a direct loan.
With a direct loan, you are borrowing from the federal government and making loan payments to the Department of Education. A government direct loan is designed to be more manageable during repayment. Your direct loan package will likely include a combination of subsidized loans based on need, with no interest due until you begin repayment, and unsubsidized loans where interest begins immediately. All borrowers have flexible repayment options.
Whether you are just starting college or about to graduate, consider your options when looking for student loans:
1. Apply for financial aid and find out if you qualify for direct student loans.
2. If your federal direct loans don’t meet all your expenses, consider private loans for students.
3. Consider direct loan consolidation if you are already accumulating interest.
Action Steps
The best contacts and resources to help you get it done
Apply for student loans with online direct loan servicing
Start your direct student loans search with a federal student aid application. Then find out about scholarships at your college financial aid office. Financial aid staff help you anticipate expenses and get you through funding so your tuition is paid. You can complete application forms in your school's financial aid office or online.
I recommend: Complete the
Free Application for Federal Student Aid (FAFSA) to apply for direct student loans, the Pell Grant, PLUS loans and work-study. Be sure to have your school codes and tax information before you log in. Use
Student Lending Works to apply for a no-fee national direct student loan or get as low as 7.50% interest on a federal Grad PLUS loan.
Consider private student loans to fill gaps in your federal direct loans
Federal loans offer better interest rates and repayment terms, but you may need additional private student loans to finance a college education. The terms for private loans are less flexible during repayment. But alternative loans are designed for students with college expenses and offer specific features compared with other loan options. Be sure you understand the type of loan you are accepting.
I recommend: Sallie Mae's 1-2-3 approach offers a variety of private student loans at lower rates than other lines of credit. Sallie Mae is also a direct loans servicing center. A private
CitiAssist loan offers competitive interest rates and you make no payments while in school. Apply online to get a response now and then work through your financial aid office later.
Get manageable repayment plans with consolidation direct loan servicing center
Consolidate fixed interest rate federal student loans and build your credit rating right out of college. Consolidate under federal loan options but consider that direct loans and FFEL/PLUS loans must be consolidated separately, and you can't consolidate your federal direct loans if you're still attending a college.
I recommend: The
Direct Consolidation Loan Program offers four repayment plans, simplifying multiple loans-in-repayment into a new loan with lower interest and extended repayment terms for more manageable debt.
NextStudent offers low interest rates and low monthly payments and a personal loan consultation for free.
Tips & Tactics
Helpful advice for making the most of this Guide
- Take care when filling out applications. Mistakes can seriously delay direct student loans.
- Start your search for financial aid as early as possible.
- Consider loan payments in your monthly budget and pay back interest as you go to keep your total loan from compounding annually.
- If paying for college seems impossible, rethink your favorite school choices and talk to financial aid counselors at a direct loan servicing center. Some schools offer funded scholarships for tuition per term.
- Beware of lenders with excessive application fees.
Related Resources from Business.com
Comments
Is any content on this page inappropriate? To let us know, please 
