Query: What are loans and what types are available?
Context: There are several loan types. The U.S. Department of Education’s federal student loan program (AKA the William D. Ford Federal Direct Loan Program) is the umbrella over this program. That means that the U.S. Department of Education is your lender. There are four types of Direct Loans available:
Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need.
Direct PLUS Loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify.
Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.
This info was pulled directly from the FAFSA site. You can find more information here.