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.
