The Qualifications and Requirements for Federal Direct Student Loans

Federal Direct Student Loans allow many students to pursue higher education with the help of money they borrow directly from the Federal Government. This program is also referred to as the William D. Ford Federal Direct Loan Program. The program was started in 1993 when President Bill Clinton signed the related bill into law. At that time, there was more than $7 billion in funds for loans. That number has since gone down to around $500 million that is available each year for loans. With the amount of money limited, only those that meet certain qualifications and requirements will be able to get some of it. Here are some of the qualifications and requirements for a Federal Direct Student Loan.

Financial Need

One of the biggest factors in determining who gets this type of loan is financial need. They government gives the loans to those who need them the most. To determine who actually needs a loan, the program requires all applicants to fill out a Free Application for Federal Student Aid. This FAFSA application allows the government to determine exactly what your financial need is. It is based on the student's income as well as their parents' if the student is a dependent. 

Once they determine what your financial need is, they will put you in the category of subsidized or unsubsidized. Those that have the biggest financial need get a subsidized package. With a subsidization, the government actually pays the interest on the loan while you are in school. They also give those with a subsidized loan package a cheaper interest rate for the loan. Those with unsubsidized loans can defer the interest until after they are out of school, and the rate is higher. 


In order to qualify for this type of loan, you also must meet certain education criteria. You have to have a high school diploma or G.E.D. In addition to that, you have to be working towards a degree in a qualified institution. 

Other Requirements

In order to qualify for any federal loans, you also must be a United States citizen or qualified resident non-alien. You have to have a Social Security number unless you meet certain exemptions. In addition to that, you must register for the Selective Service once you turn 18 if you are male. 

Another thing that they look at before issuing these loans is whether or not you are in default of any other federal loans. If you are not in good standing with the federal government in some other capacity, they will not give you any more money to work with. You also have to agree that you will use the money only for educational purposes and nothing else. 

As long as you meet these basic requirements, you may be able to qualify for a Federal Direct Student Loan through the William D. Ford program. 

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