Federal Direct Loan Subsidized Program - The U.S. Department of Education pays interest while the borrower is in school; students must be attending at least half-time (6 or more credits per semester) and have financial need; fixed rate is set annually for new borrowers. Effective July 1, 2012, subsidized loans first disbursed after this date will only have the interest subsidized while the borrower is in school. The borrower will be responsible for the interest that accrues during the grace period. Loans must be repaid.
As of July 1, 2013, any first-time borrower (which is defined as someone who has no outstanding balance on a FFELP or Direct loan on or after July 1, 2013) will only be able to obtain Federal Direct Subsidized loans for a maximum of 150% of the published program length in which they are enrolled. Additionally, the subsidized loans that had been borrowed up to the 150% point will lose further government subsidy and interest will begin to become the student's responsibility if they do not graduate by the 150% point (and continue to be enrolled in the same or a shorter undergraduate program). From that point forward, these subsidized loans will become unsubsidized loans.
Federal Direct Loan Unsubsidized Program - The borrower is responsible for all interest; must be at least half-time (6 or more credits per semester); financial need not required; fixed rate is set annually for new borrowers.
Federal Direct Parent Plus Loan - For parents of dependent students; students must be enrolled at least half-time (6 or more credits per semester); financial need not required. Repayment begins 60 days after the disbursement of funds.
Direct or Additional Unsubsidized Loan - This loan is available to dependent students whose parents have been denied a PLUS loan. This is non-need based. Interest and repayment terms are similar to the Unsubsidized Loan as described above.