Are DIRECT Loans FEDERAL Loans? Q: Are Direct Loans Federal Loans? A: Yes, direct student loans are federal student loans that come directly from the Department of Education. These are usually the most affordable student loans available. Direct Loans are generally awarded as part of a larger award package, which may contain other types of aid as well, to help you meet the costs of going to college or career school. The Direct Loan Program offers the following types of loans: Subsidized Stafford Loans: For students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods. Unsubsidized Stafford Loans: Not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. PLUS Loans for Parents and Grad Students: Unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods. Federal Consolidation Loans: Eligible federal student loans can be combined into one Direct Consolidation Loan. Student borrowers are not required to begin making payments until after they drop below half-time attendance. Your school will tell you how much you may borrow and the types of loans you are eligible to receive. The information below will give you an idea of how much you may be eligible to receive. Learn more at: www.direct.ed.gov