Federal Direct Loan Information
The Federal Direct Loan program offers loans at a low interest rate with repayment terms designed with students in mind. In most cases, students will not have to start repaying the loans until six months after a student graduates and/or enrolls in less than six units (half-time).
Loans must be repaid with interest so it is important to understand the rights and responsibilities as a borrower. All borrowers are required to complete the Loan Entrance Counseling before the office processes a loan.
Taft College participates in the William D. Ford Federal Direct Loan Program. The U.S. Department of Education is the lender for the William D. Ford Federal Direct Loan Program. Direct Loans are issued by the federal government. The loan is serviced by the Federal Direct Loan Servicing Center. There are no banks or lending institutions.
Types of Direct Loans
Subsidized Loans are available to eligible students who demonstrate financial need to help cover the costs of higher education at a college or career school. If you qualify, the federal government will pay the interest on the loan while students are in school and during periods when students are authorized to defer loan payments.
Unsubsidized Loans are available to students regardless of financial need. Students are responsible for the interest which accumulates on the unsubsidized loan while the student is attending school, during the grace period and during any periods when the student is authorized to defer the loan payments. The students have the option to pay the interest during while enrolled in school or pay it later. If students delay payment the interest will be added to the principal balance. This addition of interest to the principal balance of the loan is known as capitalization.