Federal student loans are funded by the U.S. Department of Education and come with various benefits, including fixed interest rates and income-driven repayment plans. Here are the key types:
Direct Subsidized Loans: Available to undergraduate students with financial need. The government pays the interest while you're in school at least half-time, during the six-month grace period after you leave school, and during deferment periods. Direct Unsubsidized Loans: Available to both undergraduate and graduate students; no financial need requirement. You are responsible for paying the interest at all times, but you can let it accrue and be capitalized. Direct PLUS Loans: For graduate students or parents of dependent undergraduate students. These loans require a credit check and are not need-based.
