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DIRECT STUDENT LOANS
Direct student loans, also known as William G Ford student loans, are the government’s foray into the lending student loan lending industry. Like Stafford student loans, they carry with them five years of qualified deferment and up to five years of forbearance. Unlike Stafford student loans, the loans are made direct from the government to the student or parent borrower.
Direct student loans may be consolidated. In fact, the Direct student loan organization is required to accept any federally guaranteed student loan for consolidation.
Because the government set themselves up to compete directly with private industry, they gave themselves a couple of advantages not available to the private lenders. Direct student loans have an available repayment option called an income-contingent repayment plan. Under this plan, if a borrower makes their payments for twenty-five years, but is unable to pay off the loan in its entirety, the balance can be forgiven. Of course, this requires consolidation since the standard repayment plan is ten years, and consolidation may convert the personal loan into community property, but if you never get your head above water financially it’s a nice option.
The other advantage Direct student loans have over Stafford student loans is also in consolidation. You can consolidate your Perkins loans through the Direct student loans program, and the Perkins loans retain their subsidized status. If you consolidate subsidized Perkins loans through a Stafford student loan lender, the Perkins loans lose their subsidy.
For more information about Direct student loans, read “Surviving Your Student Loans”.
Direct Student Loans:
Student Loan Topics:
Master Promissory
Note, Student Loan Deferment, Student Loan Forbearance, Student Loan Consolidation, Student Loan Discharge, Student
Loan Grace Period, Subsidized Student Loans, Unsubsidized
Student Loans, Stafford Student Loans, Perkins Student Loans, Direct Student Loans, PLUS Student Loans, William G. Ford
Student Loans, Student Loan Delinquency, Student Loan
Default, Student Loan Payment Options, Student Loan Case
Studies, Student Loan Management, Additional Reading Relating
To Student Loans, How Do I Get A Student Loan, How Do I Confirm
the Status of my Student Loans, Why Do I Owe Twice As Much As I Borrowed
On My Student Loans, Pending Changes Affecting Student Loans, Bankruptcy and Student Loans, Student Loans And Your Credit
Report, Student Loans, Gifts.
