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Federal Direct Student Loan Program: Wikis


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Student loans in the U.S.
Regulatory framework
Higher Education Act of 1965
US Dept of Education
FAFSA Cost of attendance
Distribution channels
Federal Direct Student Loan Program
Loan products
Perkins · Stafford
PLUS · Consolidation Loans

Private student loan

The William D. Ford Federal Direct Loan Program (FDLP), often referred to as "Direct Loans," is a United States Department of Education program that provides loans to help students pay for education after high school. The Department of Education acts as a lender, providing funds for Stafford loans and PLUS loans in the same amounts as the Stafford and PLUS loans offered through the Federal Family Education Loan Program (FFELP).

The Department of Education allows schools to choose which program, FDSLP or FFELP, best suits the needs of its students. The Department of Education does not currently allow a student to choose an FDSLP loan if the school chooses to participate in FFELP, and vice versa. However, students may be able to choose to consolidate loans under either FDSLP or FFELP.

Political history of the program

Congress passed a version of the Direct Loan program under President George H. W. Bush, but Bush promised to veto it. Candidate Bill Clinton promised that he would sign such legislation into law if elected, and the Direct Loan program was one of the first laws he signed in 1993.

Funding for the Federal Direct Student Loan Program has decreased from just over $7 billion in 2006 to $509 million budgeted for 2008.[1]

Democrats have made more student-favorable Direct Loan terms part of their platform. Under Obama's new budget, all new loan originations will be under the Direct Loan program by July 2010, netting $6B in annual savings.[2] The bill approving the measure passed the House of Representatives on September 17, 2009.[3]

In comparison, other countries have also experimented with government-sponsored loan programs. New Zealand, for instance, now offers 0% interest loans to students who live in New Zealand for 183 or more consecutive days[4] (retroactive for all former students who had government loans), who can repay their loans based on their income after they graduate[5]. This program was a Labour Party promise in the 2005 general election.


  1. ^ Department of Education. Budget of the United States Government: Fiscal Year 2008.
  2. ^ Organizing for America | "Obama Calls for Elimination of Subsidies to Student Loan Providers."
  3. ^
  4. ^ Inland Revenue. "Interest-free student loans - eligibility and what you need to do (About student loans)."
  5. ^ Inland Revenue. "Student loan repayment threshold (Making repayments)."

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