There are two main sources for Federal Student loans one is Federal Direct Loan Program that comes from the U.S Department of Education and other is Federal Family Education Loan Program, which come from participation of FFEL lenders.

Both of above mentioned loan programs include the standard federal student loans: Stafford Loans, PLUS Loans and the Federal Consolidation loan.

Now question is that what is the difference between these two loan programs?

There is not a big difference between the Direct Loan program and the FFEL. About that your college or the university will let you know in which program it participates. Many colleges even participate in both, in which case you may choose.

How Students can Get Benefit from Direct Student Loans?

Federal loans borrowed through the Direct Loan Program or through FFEL are almost same there is only difference that you conduct all business directly with the federal government’s Direct Loan Servicing center.

Features of the Direct Loan Program

Direct Loan program include following features:

• Loan are directly originated and managed by U.S government
• Repayment terms are flexible
• It include Stafford Loans, PLUS Loans for parents and Grads and Consolidation Loans
• Low interest rates and fees
• You can manage you loans online

Requirement for Direct Federal Student Loans

Requirements for direct student loans are almost same as other federal student loans.

Here are the requirements that are needed for federal direct student loans:

• You must be a U.S citizen, eligible non-citizen or resident.
• You must be enrolled in a college or university half time or more.
• You must qualify the income bracket determined by the government and your school.
• You never been defaulted on a student loan before.

Applying for Direct Federal Loans

Applying for Direct Federal Loans its necessary to complete the FAFSA and file it by the earliest federal or state deadline. You must file the FAFSA before the deadline if you failed to file it then you will miss so many low-cost financial aid options. If you got any difficulty while filling up the application you can contact to your high school guidance counselor or college financial aid specialist immediately.

The award letters, which you will get from the colleges that you’ve been, accepted itemize the types of financial aid you’re offered. Your award letter will indicate whether you qualified for Federal Direct Stafford Loans or PLUS Loans.

Whether you choose a Direct Stafford Loan or PLUS Loan its necessary for you to complete a Master Promissory Note, that is a legally binding contract between yourself and the Department of Education, the lender to whom you will eventually make all your loan repayments.

Repayment of Direct Federal Loans

Direct Stafford Loans are also having 6 months grace period same like the FFELP Loans.

There are four payment plans for Direct Federal Loans:

1. Standard Payment Plan-fixed monthly payments for 10 years
2. Extended Payment Plan-fixed or graduated payments for 25 years; must have at least $30,000 in debt
3. Graduated Payment Plan-payments increase over life of loan; up to 10 years to pay
4. Income-contingent-payments are refigured annually considering your income

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