Ford Student Loan

The William D. Ford Direct Loan Program officially came into existence when President Clinton signed the congressionally-created program into law as one of his first acts in 1993. Ever since, Ford student loans have been helping students and parents pay the high cost of higher education. Although funds have decreased from $7 billion per year to just over $500 million under the term of George W. Bush, the program is still in place for those who need it most.

Ford student loans work under a program that allows students and parents of non-independent students to borrow money for school directly from the Department of Education without having to go through a bank. These loans offer low interest rates and the convenience of dealing with a single entity, the Direct Loan Servicing Center, for anything regarding the loans, even if loans were accepted for different schools. Other benefits of direct loans include 24/7 loan account access, and several repayment plans meant to fit any situation. Repayment plans can also be switched should the borrower’s situation change.

Applications for a Ford student loan are only accepted from the Free Application for Federal Student Aid (FAFSA) on the web at www.fafsa.ed.gov. Once the application is processed, it is sent to the school the student will be attending so it can be determined if the student is eligible. Eligibility comes through the all-in-one federal student aid award package. If accepted, one or more options will be listed in the package. The three possible options are as follows:

• Subsidized – Subsidized loans are for those with the most financial need. They are interest-free while attending school, for a grace period after school has been completed, and during acceptable deferment periods.
• Unsubsidized – These loans are not based on financial need and they carry interest throughout the term of the loan.
• PLUS – PLUS loans are unsubsidized loans made for parents with dependent children as students. They can help cover costs not covered by any other form of financial aid.

Once the award package arrives, eligible students have the option of accepting Ford loans or not, up to the amount listed in the package. Funds are usually paid by check and do not need to be repaid until attendance drops below half-time.