Some students with a direct loan have a subsidized Stafford Loan. The subsidized loan has an interest subsidy.

All students awarded those direct loans can count on the government to cover their interest payments while they are still in school..

Not all Stafford Loans are direct student loans, and not all direct student loans are subsidized. Where students do not show tremendous need, the government might award an unsubsidized Stafford Loan. Such unsubsidized loans do not come with an interest subsidy.

PLUS Loans represent a third type of direct student loan. PLUS loans are low interest loans for graduate students and parents.

As with the other direct student loans, the application for the PLUS Loans entails submission of a FAFSA and a MPN.

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