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Debt Counseling Assistance :: Direct Federal Student Loan
Direct Federal Student Loan:
Repaying and Applying for a Student Loan Through the Direct Federal Program
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The Direct Federal Student Loan Program (FDSLP) includes several different types of loans. These are Direct PLUS Parent Loans, Direct Consolidation Loans and Direct Stafford Loans.
Through the Direct Loan program, the government offers loans to students and parents directly, through their universities and colleges.
The program is similar to the FFEL loan program, except the loans are funded and repaid differently. When you get a Federal Direct Student Loan, there are four repayment options available to you. To learn more about each of these repayment options and more, keep reading.
Income Contingent Repayment Plan
The Income Contingent Repayment Plan bases your monthly loan payments on the amount of your loan and your annual income. Essentially, a student with a lower annual income would make lower student loan payments.
Extended Repayment Plan
The Extended Repayment Plan lets you extend your direct federal student loan repayments out over a longer period, typically between 12 and 30 years, depending on the size of the loan. This means you can extend your loan and get lower, more affordable monthly payments.
Graduated Repayment Plan
The Graduated Repayment Plan lets recent graduates make lower monthly payments the first few years after graduation. After that, the monthly payments increase every two years until the loan is completely paid off. Repayment terms run from 12 to 30 years.
Standard Repayment Plan
The Standard Repayment Plan is a basic repayment option – a fixed payment is made every month for a period of up to 10 years. The payments must be a minimum amount of $50.
How Much You Can Borrow
If you're an undergraduate, you can usually borrow up to a maximum of $3000 per calendar school year. The maximum amount for your entire undergraduate career is $15,000.
Meanwhile, graduate students can borrow up to a maximum of $5000 per year with a degree maximum of $30,000.
How much money you receive through a direct federal student loan is often based on your actual financial need and how much funding your school can offer.
By filling out the Free Application for Federal Student Aid (FAFSA), your needs are matched with your college's funding level.
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