how the federal direct loan program works
the federal direct loan program offers several types of loans including subsidized direct loans unsubsidized direct loans direct plus loans and direct consolidation loans for refinancing student loans subsidized direct loans are the only student loans made by the federal government that are based on financial need the u s department of education pays the interest on these loans while the student is in school 1all loans granted through the federal direct loan program have maximum annual amounts and set aggregate amounts each successive year allows for an increase in the total maximum yearly loan amount students who wish to apply for funding must first submit the free application for federal student aid fafsa undergraduate students can borrow 5 500 to 12 500 per year depending on their year in school and their dependency status these amounts are for both direct subsidized loans and direct unsubsidized loans 2professional and graduate students may borrow 20 500 each year in direct unsubsidized loans and parents of undergraduate students can borrow using a direct plus loan 2loans from the federal direct loans program are eligible for the student loan forgiveness proposed by president joe biden but private loans are not biden s student loan forgiveness program was deemed unconstitutional by the u s supreme court on june 30 2023 but the administration announced the new save repayment program on the same day 3your college or university determines the amount of money in federal loans that you can borrow 