Direct Loans & How to Apply

The Direct Loan Program is one of the Federal Student Aid (FSA) programs offered by the Department of Education, and it provides students with a simple, inexpensive way to borrow money to pay for education after high school. You apply for FSA by filling out the Free Application for Federal Student Aid; you can use the paper FAFSA, but we recommend using the online version, FAFSA on the Web.

If your school participates in the Direct Loan Program, you'll then need to complete a master promissory note (MPN) to get a Direct Loan. The MPN explains the loan terms and is the legally binding agreement that you will repay the Department.

Loan Counseling The Direct Loan Servicing site has online entrance and exit counseling tutorials that you can take if you are or will be a Direct Loan borrower.

Check out the Frequently Asked Questions and the Glossary to see if they answer any questions you have.

Publications To find out more about the Direct Loan Program, check our library of publications for borrowers, including the new entrance and exit counseling guides and the basics brochures. These publications will tell you more about how much you can borrow and your rights and responsibilities when you're repaying your loan.

Interactive Calculators Use the budget calculator to enter your estimated income and expenses and find out how much money you'll need for the school year. Then use the repayment calculators to compare the initial monthly payment amounts you would make under the various repayment plans.

Repayment Plans There are four types of repayment plan - standard, extended, graduated, and income contingent - so you can choose the one that is best suited for your situation.

Avoiding Default Because the financial consequences for default are severe, you should do all you can to avoid it. Deferment and forbearance are options that might help you as you repay your loans. Also, as mentioned above, you can choose the repayment plan that is best for your financial situation.

Servicing Your Direct Loans If you already have a Direct Loan, the servicing site is your one-stop center for managing your loan. Make online payments, take online loan counseling (as noted above), view your account balances and payment history, change your billing options, enroll in electronic services, learn about default management and deferment and forbearance, and more.

Consolidation Applications Consolidating your loans can be a great way to simplify repayment and lower your monthly payments. If you have a Direct Loan, you can consolidate it with other student loans. To find out more, visit our consolidation webpage.