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Direct Loans

If direct loans are something you've never heard of, then you can't determine whether or not you qualify for such a loan until you learn more about it. Direct student loans are a type of Federal Student Aid (FSA) loan that are offered directly through the Department of Education, or DOE, and are considered an affordable option for college students to finance their college education.

In order to be eligible for a direct loan, students have to make sure first that the school in which they are interested is a participant in the program. Once this is assured, students should fill out a FAFSA (Free Application for Federal Student Aid), which will submit the student for a number of different direct loan programs. The Department of Education can further explain the options available, offering guidance to those looking for the best avenue to follow in obtaining funding.

Upon approval for a direct student loan through the DOE, students will be required to sign a Promissory Note, which acts as a legally binding contract regarding the disbursement and repayment terms of the loan. Before you sign the note, you need to be certain that you understand all the legal jargon included in the note.

Typically, students can choose from several options in their repayment of direct loans. Repayment may be standardized with regular payments, graduated with payments starting low and increasing over time, extended beyond the typical repayment period, or income-based so that your payments are never more than you can afford, and you don't run the risk of ruining your credit.

Once you've graduated, you may have multiple loans to repay. In order to reduce the payments and simplify matters, you may want to look into DOE direct consolidation loans, which will offer you a single low payment with a low interest rate to cover all your loans.

Paying for school is not easy, but we are here to help. OEDb's student finance section will help you find the money you need to pay your tuition and other college expenses. We cover scholarships, college grants, and student loans. Scholarships and grants are both forms of "free money", meaning they don't need to be paid back. Scholarships are typically awarded by businesses or individuals, with the money being earmarked specifically for tuition. They can be awarded based on a student's location or by religious affiliation, such as Catholicism or Islam. Grants are typically awarded by governments or non-profit organizations and the money often can be applied to several different expenses a student may incur, not solely tuition. They can be awarded based on location or ethnicity, for instance African American or Hispanic. Loans are not considered "free money", because unlike scholarships and grants, they do need to be paid back after graduation. Common federal loans include Perkins and Stafford. Loans are also available by location.