William D. Ford Federal Direct Loan Program

The William D. Ford Federal Direct Loan Program is the largest federal student loan program. The U.S. Department of Education is your lender. There are four types of Direct Loans:

Direct Subsidized Loans

  • Awarded to undergraduate and graduate students demonstrating financial need
  • School determines the amount you can borrow, and the amount may not exceed your financial need
  • The U.S. Department of Education pays the interest
  • You can apply through FAFSA
  • Rate of Interest 3.4% and 1% loan fee on all Direct Subsidized Loans
  • To receive the loan you should complete entrance counseling, and sign a Master Promissory Note (MPN), to receive the loan
  • School will receive your loan funds for tuition fees
  • You can cancel your loans before it is disbursed. You may cancel all or part of your loan at any time by notifying your school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames

Direct UnSubsidized Loans

  • Awarded to undergraduate or graduate student, but the student need not demonstrate financial need
  • Your school will determine the amount you can borrow by considering the cost of attendance and other financial aid you receive
  • You are responsible for paying the interest during all periods.
  • You can apply through FAFSA
  • Rate of interest is 6.8% for both undergraduate and graduate students and 1% loan fee on all Direct unsubsidized Loans
  • To receive the loan you should complete entrance counseling, and sign a Master Promissory Note (MPN), to receive the loan
  • Your school will receive your loans funds for tuition fees
  • You can cancel your loan before it is disbursed. You may cancel all or part of your loan at any time by notifying your school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames

Direct PLUS Loans

  • Awarded to graduate or professional students and parents of dependent undergraduate students provided their expenses are not covered by any other aid
  • Maximum PLUS loan amount you can borrow is the cost of attendance (determined by the school) minus any other financial assistance received.
  • Either the student or the parent who has taken the loan for the education of the child, will repay the loan
  • You can apply through FAFSA
  • Fixed interest rate is of 7.9%. There is a 4% loan origination fee on all Direct PLUS Loans.
  • You will be required to sign a MPN, agreeing to the terms of the loan. Graduate or professional students will also be required to complete entrance counseling before receiving a PLUS loan.
  • Your school will receive your loans funds for tuition fees
  • You can cancel your loan before it is disbursed. You may cancel all or part of your loan at any time by notifying your school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames


Direct Consolidation Loans

Direct Consolidation Loan is a consolidation of several federal loans into one loan. As the result, you have to make a single monthly payment instead of one. Click here for details on Direct Consolidation Loan.

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