DIRECT STUDENT LOANS
The Direct Loans are funded by the US Department of Education and borrow money from the federal government. If the school, which you are intrested in, participates in the Direct Loan Program, you want have any problem to get it.It is managed by the Direct Loan Servicing Center, where you can find all information that you need.You have also 24 houres access everyday to your Drect Loan acount on www.dl.ed.gov.
Direct Loans details
A detailed description and analysis of direct loans:
- Interest depends on a subsidy and graduation and it is:
- -5,6% ( subsidized for undergraduates with a first disbursement date between 1 July 2009 and 30 June 2010.
- -6,8% (Subsidized for graduate students and unsubsidized for all students)
- Repayment plan - There are four types of repayment plans: standard, extended, graduated, and income contingent. You may change it if there will be such need.
Let's look at those types:
- Standard - The monthly payment is at least 50$ and its fixed. You have 10 years to repay whole money.
- Extended - It is a plan for people who borrow more than 30.000$. You have 25 years for repay and two possibilities :fixed(the same amounth every month) and graduated (firts payments are low and increase every two years).
- Graduated - As we have in extended graduated plan (increasing payments) but theres no loan limit and you have 10 years for repayment.
- Income contingent - The monthly payment depends on your adjusted gross income (AGI), familly size and a number of your loans. The repayment period is 25 years.
Which plan will be the best for you it depends on your needs and financial situation.If you can handle with higher monthly payments choose the first one.It enable you to pay whole loan in a short time.The second one is for people who expect smaller instalments but it last more time and the interests will be proportionate higher to the repayment time.If your income is growing choose the graduated plan.The Incom contingent plan is very flexible.It allows you to pay the loan and other financial obligations at the same time not causing any problems with it.
- Additional features - Sometimes the current situation force us to defer the payment.
The reasons that qualify you to do this are:
- Bad economy situation(for 3 years)
- Loss of the job
- The disability rehabilitation programm
- The full time fellowship programm
- Serve in the army or other form of activities during the war or national emergency period
- Forbearance - if you are not able to take a deferment (haven't qualified in accordance to above-mentioned requirements) there are some other options. You may temporary stop the repayment, pay smaller monthly amount of money or extend the repayment time because of illness for instance.
- Another very usefull fuction on the Direct Loan is consoliadtion.You may consolidate all your loans into one (which results in only one monthly payment).
Cancelling the loan
The Direct Loans give a possibility to cancel the loan (all or a part) if :
- you are a new borrrower and a full-time school teacher (elementary or secondary for five years) with low income
- work in public service and have made 120 payments
- your school were closed befor you graduated it or someone took a loan using your identity(theft) or falsified your signature on the documents
- you became disabled after the loan was made
- you are bankrupt
- you died
The Direct Loans have many types of repayment plans, according to your needs, and other important features which should be worth consifering and which will make you feel more comfortable and peacefull during the time of repayment like cancellation, consolidation or deferment.