Direct Student Loans: Offers Both Federal & Private Loans for Higher Studies

There is no denying the fact that there are lots of grants and scholarships available to make higher education affordable to them, but only 4 out of every 10 students qualify for such financial aid program. For the remaining ones, it becomes a Herculean task to manage the college expenses on their own because many of them hail from average middle class families with shortage of funds. But now if you are one of such students who are finding it tough to carry on your higher studies, then you can opt for the Direct Student Loans. This non teri loan program is made by a financial lending agency called Direct for the past one decade or so.

The money so availed under the Direct Student Loans falls under 2 different categories; federal and private. The Direct Federal Loans pays for the tuition fees only and the loan is available in 2 forms called unsubsidized and subsidized. With the former one, there is no interest charged for the borrowed sum as long as the student has not completed their education. While with the latter one, students would have to pay for the interest rate as long as the course is not completed. The money is made available to the students regardless of the fact whether their credit score is good or bad. As far as the interest rate is concerned, it is quite reasonable and students can easily afford it. The rate of interest at present is 5% and the repayment options are very flexible. If the students fail to get a decent job after the completion of course, then the Direct Federal Loans can be deferred but only for a certain time limit.

For students who want money to bear the total cost of attendance and have good credit scores, they can opt for the Direct Private Student Loans. If the credit score is not good then the borrowers can apply for this loan with the help of a credit worthy cosigner. The money is available for both graduate and post graduate studies and the maximum amount that a student can avail is up to $120,000 for undergraduate students and $150,000 for graduate students. The rate of interest charged is certainly on the higher side and the time to repay back the borrowed sum is fixed for 10 years. There are no prepayment penalties with Direct Private Student Loans and repayment begins after 6 months from the date course is completed.

There are certain eligibility criteria that a student must adhere to before the money is made available to them. The students need to be a permanent resident of United States of America with age more than 18 years. In addition to this, the college in which they are enrolled should be accredited by the Department of Education with their course being a full time one. If the borrower applies for the Direct Private Student Loans, then they need to have a valid bank account. In the case of Direct Federal Loans, the money is directly sent to the college concerned and is not handed over to the students.