Direct student loans do not come from private
banks, savings and loans or financial institutions.
These student loans come directly from the U.S. Department
Your direct student loans money will
not come directly to you,
it is placed in your account at the college you are
attending. The school will immediately take out
their portion for tuition, lab fees and you will then
send you a check for the remainder of your direct student
loan and you can use it to pay for other expenses including
room and board, books, class fees and computers.
Direct student loans have a single access point
(Direct Loan Servicing Center) and you can keep track
of everything including accruing interest, how much
you own, information on repayment options of your student
loan and various other things related to your loan.
That means if you go to several different colleges
before you graduate, you simply login to your account
(online 24/7) and look up any account information you
You have many different repayment options and
you don't have to start payments on your direct student
loans until 6 months after graduation.
Many different types of student loans are considered
"direct student loans" and you can see a complete
list including up to date information at: Types
of Student Loans . The 3 most popular are Subsidized
Stafford Loans, Unsubsidized Stafford Loans, and PLUS
You must be a half time or full time student in
order to receive these funds. Also the college
you are attending must participate in the Direct Loan
Direct Student Loans Secrets***
Be prepared to sign a MPN or promissory report.
It will explain the terms and conditions of your loan
and agreement to repay your loan. In other words,
it's to government that is involved and they create
more paper trails than flies on honey. They need to
cover their A**es and want to make sure you completely
understand that YOU HAVE TO PAY THIS MONEY BACK, regardless
if you graduate or not.
Be prepared to pay a "fee" for your
loan. Usually it runs about 2% of the loan and
they will take this fee out, before your college receives
You will be required to take a "Entrance"
and "Exit" counseling. What the heck
is this? Basically more paperwork, but they want
you to understand what the loan is all about, explain
more terms and conditions and prepare you for paying
them back. Once you complete this online, then you will
be required to take a quiz to make sure you understand
what is going on. The same can be said for the
Exit counseling. Except this time they want you
to learn about their repayment options which are:
Standard Plan -this is a direct student loans
repayment option of making monthly payments for up to
Extended Plan - depending on the total amount
of your loans, you can get a plan that gives you up
to 25 years to pay back.
Graduated Plan - lower payments to begin with, they
increase with time and gives you the flexibility to
pay off your loan in full within 10 years.
Income Contingent Plan - adjusted yearly, your repayment
plan is based on your annual income, your family size
and total amount of your loan. Don't forget if you are
married they will take your spouses income and throw
it into the mixing pot. After 25 years any unpaid monies
will be forgiven.
is a BIGGY
If you chose to have automatic withdrawal from
either your checking account or savings account, they
will give you a .25% decrease in your interest rate.
It might not sound like much, but over time this is
a really nice feature.
If you find repayment is becoming a burden, you
can request help in changing your loan payments and
you should do it. However, if you default on your
loan, you better be prepared to have a heck of a time
purchasing anything on credit. It probably will never
happen because your credit rating will plummet dramatically.