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Direct Loans

Categories: Loan and Mortgage,

Loans made by the U.S. Department of Education (instead of a private lending institution) under the William D. Ford Federal Direct student loan Program. As of July 1, 2010, all schools will participate in the direct lending program where the student loan lender is the U.S. Government. direct loans consist of Direct Subsidized stafford loans, Direct Unsubsidized stafford loans, Direct plus loans and Direct consolidation loans. A student can receive a Direct Unsubsidized stafford loan regardless of financial need. The interest rate on a Direct Subsidized stafford loan for the 2010-2011 academic year is 4.50% and the interest rate on a Direct Unsubsidized stafford loan is fixed at 6.80% (for loans disbursed on or after July 1, 2006). The interest rate on Direct consolidation loans is fixed at the weighted average of the loans being consolidated and capped at 8.25%. The interest rate on Direct plus loans is fixed at 7.90% (for loans disbursed on or after July 1, 2006). Students and parents can receive direct loans only if the student's school participates in the direct loan program.

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