Direct federal student loans are lent by the U.S. Department of Education themselves and not a bank or any financial institution. This program is called as The William D. Ford Federal Direct Loan Program also known as FLDP, FDSLP and direct loan program. Under this the government provides loans for students and parents at low-interest in order to help them pay for the students’ education costs once they have finished their high school. This is the only loan program in the entire United States that is backed by the government itself. It is based on the Health Education Reconciliation Act of 2010. These are available to vocational, undergraduate and graduate post secondary school students and parents too.

It is useful to help defraying costs of the education at a participating school. There are also few restrictions imposed when this loan is taken. Six months after the students stops carrying a minimum of one-half of the normal full-time workload of academics the repayment on the loan starts. Just 60 days after disbursement of the final installment the repayment of principal and interest on PLUS loans starts. Just within 60 days after the proceeds of a consolidation loan have been utilized to release the liability of the borrower on the loans chosen for consolidation repayment begins. Deferments and forbearance of payment could be allowed for particular authorized periods.

There are also certain eligibility requirements to obtain a direct federal student loan. Direct student loans are given only to a U.S. citizen, national, or any individual living in U.S. not a temporary cause. The student should be enrolled or accepted to be enrolled in any degree or certificate program at the minimum of a half-time basis. A student enrolled for singe 12 month non-degree / non-certificate program which the school determines to be necessary for enrollment into a degree or certificate program can also obtain the loan. The parents of a dependant student can borrow this loan under the Direct PLUS program. PLUS loans and direct unsubsidized loans are regarded as non-need based programs. Direct subsidized loan is given only to those found eligible in financial need analysis for Federal interest.