Direct loans are subsidized and unsubsidized loans for students. Such loans are financed by the Department of Education. These loans also include money that parents can take out to help finance their child’s education and consolidation advances for both parents and students.

The process by which these types of loans are applied for is fairly simple. An application known as the Free Application for Federal Student Aid is filled out by the applicant. The application is typically referred to as the FAFSA and can be completed online for no cost to the prospective borrower. Total completion time is between ten to twenty minutes if all the proper information is in hand.

The first part of the FAFSA will ask the applicant for personal information such as name, address, marital status and telephone number. I will also go through a process by which dependency status is determined. Next the individual will need to fill out information regarding the school that he or she is planning on attending. He or she will need to fill in the school code and select the location of the institution. Other information such as planned living arrangements will also be asked for. Students who plan to live on campus may qualify for larger loans to supplement this living expense.

The application will also ask for financial information pertaining to the previous year’s tax return. Adjusted gross income and other figures will need to be entered so that the system can determine the amount of the loans that the applicant is eligible for. The borrower will need to have copies of his or her tax return available to complete this information.

After all necessary sections are completed, the applicant will have to submit an electronic signature so that processing may begin. Processing generally takes three or four business day to a week.