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CFDA Number: 84.268
Program Type: Loans
Also Known As: Direct Loan program; Direct Loans. Direct Loans includes four components: Direct Loans, Direct Unsubsidized
Loans, Direct PLUS Loans, and Direct Consolidation Loans.
Loan Type | Characteristics | Interest Rate for New Loans as of 7/1/06 |
Direct Stafford | Student is not liable for interest when in school and during periods of grace and deferment. | 6.8% |
Direct Unsubsidized Stafford | Student is liable for interest in school and during periods of grace and deferment. | 6.8% |
PLUS | Enables parents to borrow to pay the costs of higher education for their dependent undergraduates and graduate students to pay their costs. | 7.9% |
Consolidation | Combines one or more federal education loans into a single loan. | Weighted average of loans rounded upward to nearest 1/8%. Capped at 8.25%. |
Interest rate for loans made before July 1, 2006: For Direct Stafford and Direct Unsubsidized Stafford, in-school rate is 91-day T-Bill + 1.7%; in-repayment rate is 91-day T-Bill + 2.3%; both rates are capped at 8.25%. For Direct PLUS, in-repayment rate is 91-day T-Bill + 3.1% and is capped at 9%. For Direct Consolidation, see above.
In addition, certain new borrowers after Oct. 1, 1998, who teach for five consecutive years in qualifying schools serving low-income students may qualify for up to $5,000–-and, in the case of highly-qualified mathematics, science, and special education teachers, up to $17,500–-in loan forgiveness.
Last Modified: 09/10/2008
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