Student loans are available to students and parents to cover educational expenses. When all other forms of aid have been exhausted, student loans can be a good option. However, it is important to remember that student loans are intended to finance education and not lifestyle. Student loans are real money that must be repaid, with interest, so students should borrow only what they need.
William D. Ford Federal Direct Loan Program
Federal student loans usually offer borrowers lower interest rates and have more flexible repayment options than loans from banks or other private sources. Repayment of the loan begins six months after you graduate from college or stop attending at least half-time. The interest rate for undergraduate students receiving Direct Federal Subsidized or Unsubsidized Loans first disbursed on or after July 1, 2017 and prior to July 1, 2018 is 4.45%. You can view your loan history on line at
To receive a Federal Direct Loan you must:
Annual Loan Limits
Federal Direct Subsidized Loan
This Direct Subsidized Loan is available to students with financial need. The loans are funded by the U.S. Department of Education and administered by Des Moines Area Community College. Eligibility is determined by the FAFSA. Students must be enrolled in at least a half-time status. The interest for a subsidized loan is at the rate of 4.45% and is paid by the government while the student remains enrolled in at least half-time as well as during the first six months after the student leaves school. Students need to start repaying this loan six months after graduation, or if the student drops below half-time enrollment.
Federal Direct Unsubsidized Loan
Federal Direct Loans are student loans that are funded by the US Department of Education and administered by Des Moines Area Community College. Eligibility is determined by the FAFSA, and students must be enrolled in at least a half-time status. The interest rate of the unsubsidized loan is 4.45% and it is NOT paid by the federal government while the student is enrolled. The interest accrues from the time the loan is disbursed until it is paid-in-full. Students can pay the interest while in school, or it will be added to the principal balance of the loan when entering repayment. Repayment begins 6 months after graduation, or after the student drops below half-time enrollment.
Federal Direct PLUS (Parent Loan)
The Federal Direct PLUS Loan is for parents of dependent students and is subject to a credit check. A parent may borrow up to the amount of the student’s cost of attendance less any other financial aid. Filing the FAFSA is required for this loan.
- Interest rate for Direct PLUS Loans first disbursed on or after July 1, 2017 and prior to July 1, 2018 is 7%
- Interest accrues from the time the loan is disbursed until the loan is paid-in-full
- Parent borrowers may start payment once the loan is disbursed or request a deferment
Private loans are offered by outside lenders to supplement the federal loan programs, and are available after Federal Direct Loans are depleted. Private loans are not affiliated with the federal student loan program. These loans require a separate application, which is submitted directly to the lender. The student must meet the lender’s credit criteria to qualify. The interest rates and repayment terms are also available through the lender. All students are strongly encouraged to complete the FAFSA before applying for private loans.
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