Federal Direct Loan Program

DEFINITION of 'Federal Direct Loan Program '

A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct Loan Program is issued and managed by the U.S. Department of Education and is the only government-backed student loan program in the United States. Students who wish to apply for funding must first submit the Free Application for Federal Student Aid (FAFSA).

BREAKING DOWN 'Federal Direct Loan Program '

Several types of loans are available under the William D. Ford Federal Direct Loan Program, including subsidized direct loans, unsubsidized direct loans, Direct PLUS Loans and Direct Consolidation Loans. All loans that are granted through the Direct Loan Program have maximum amounts set each year, with each successive year allowing for an increase in the total maximum yearly amount, with set aggregate amounts.

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RELATED FAQS
  1. Why are private student loans generally more expensive than federal loans?

    Make the right decision between a federal student loan and a private student loan when looking for financial aid for your ... Read Answer >>
  2. How does investing your student loans for profit actually work?

    Can you use subsidized and unsubsidized loans? How much higher does the interest rate of the investment have to be than the ... Read Answer >>
  3. Is it legal to invest my student loan money?

    Take a risk investing student loans and encounter a legal and moral gray area as well as possible financial challenges along ... Read Answer >>
  4. Do I have to pay taxes on the amount of my Federal Direct Loan Forgiveness?

    I have been granted student loan forgiveness on my daughter's $18K loan. I have exceeded the 120 loan repayment requirement, ... Read Answer >>
  5. What’s the difference between the two federal student loan programs (FFEL and Direct)?

    Learn about the differences between the two types of government-backed student loan programs: Federal Family Education Loans ... Read Answer >>
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    Read about different kinds of debts than can be combined into a consolidation loan, including unsecured debts, secured debts ... Read Answer >>
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