Direct Student Loans
Direct Student Loans
Direct Student Loans are no credit check student loans provided by the U.S. Department of Education - www.ed.gov - for those who qualify. Probably one of the best student loans available, Direct Student Loans feature low interest and attractive repayment plans for students to capitalize on.
Unique to all other student loans, the Direct Loan Program offers students who demonstrate financial need the ability to borrow subsidized loans up to $5,500 per year dependent upon the student’s dependency status and school year. A subsidized loan requires the government to pay for the loan’s interest while the borrower is in school and during the student’s grace period (the first six to nine months after the student exits school). The government also subsidizes the interest if and when the borrower requests and qualifies for a deferment or forbearance during the loan’s repayment.
Direct student loans are also available to students without financial need. These loans, are however, unsubsidized. Unsubsidized loans do not feature government paid interest. Instead, the student is responsible for interest accrued during their schooling, grace period, and any other deferments on the loan. As interest accumulates during his or her studies, the borrower has the option to pay it off. In the long run, this helps to reduce the education loan debt accrued while in school. If the interest is not paid off during deferments or grace periods, it will be capitalized. In other words, it is tagged onto the loan’s principal balance and ultimately increases the amount the borrower must repay. Furthermore, interest is charged on what was once interest. In all, a borrower can borrow up to $10,500 in Direct Student Loans depending upon their year in school and dependency status.
Graduate students can also qualify for no credit check student loans through the Direct Loan Program. Loan limits top out at $20,500 per year with no more than $5,500 of the funding subsidized. Additional student college loans for those who don’t meet their financial aid goals through the Direct Student Loans program are referred to as private student loans and are credit based loans used to cover all college expenses, including but not limited to school expenses not covered by Federal loans.
