Chapter	1
Student	and	Parent	Eligibility	for	Direct	Loans
Overview
To	be	eligible	for	Direct	Loans,	a	student	must	be	enrolled	on	at	least	a	half-time	basis	at	a	school	that	participates	in	the
Direct	Loan	Program,	and	students	and	parents	must	meet	the	general	federal	student	aid	eligibility	requirements
covered	in	Volume	1	of	the	Federal	Student	Aid	Handbook.	This	chapter	discusses	other	eligibility	requirements	that	are
specific	to	the	Direct	Loan	Program.
Direct	Subsidized	Loans	and	Direct	Unsubsidized	Loans
Only	students	who	have	financial	need	may	receive	Direct	Subsidized	Loans.	The	federal	government	does	not	charge
interest	on	Direct	Subsidized	Loans	while	the	borrower	is	enrolled	on	at	least	a	half-time	basis,	during	the	grace	and
deferment	periods,	and	during	certain	other	periods	(for	example,	during	certain	periods	of	repayment	under	certain
repayment	plans	that	determine	the	required	monthly	payment	amount	based	on	the	borrower9s	income	and	family	size).
If	a	student	has	received	a	determination	of	need	for	a	Direct	Subsidized	Loan	in	an	amount	of	$200	or	less,	a	school	may
choose	not	to	originate	a	Direct	Subsidized	Loan	and	may	instead	include	that	amount	as	part	of	a	Direct	Unsubsidized
Loan.
Financial	need	is	not	an	eligibility	requirement	to	receive	a	Direct	Unsubsidized	Loan.	The	federal	government	generally
charges	interest	on	Direct	Unsubsidized	Loans	during	all	periods,	with	limited	exceptions	(for	example,	during	periods	of
deferment	for	cancer	treatment).
To	be	eligible	to	receive	a	Direct	Subsidized	Loan	or	Direct	Unsubsidized	Loan,	an	undergraduate	student	attending	a
school	that	participates	in	the	Federal	Pell	Grant	Program	must	first	have	received	a	determination	of	their	Pell	Grant
eligibility	for	the	period	of	enrollment	for	which	the	student	is	requesting	a	loan.
No	Minimum	Age	To	Receive	a	Direct	Loan
Students	who	are	minors	may	receive	Direct	Loans,	but	they	may	not	refuse	to	repay	the	loans	based	on	a	<defense	of
infancy=	(that	is,	by	claiming	that	they	were	too	young	to	enter	into	the	contract	of	signing	the	promissory	note).
Requirement	To	Offer	Both	Subsidized	and	Unsubsidized	Loans
Direct	Subsidized	and	Direct	Unsubsidized	Loans	are	two	components	of	a	single	loan	program.	A	school	may	not	choose
to	make	only	Direct	Subsidized	Loans	or	only	Direct	Unsubsidized	Loans	available	to	its	eligible	students.	For	more
Direct	Loan	Program	Regulations
34	CFR	Part	685
No	Defense	of	Infancy
Higher	Education	Act	(HEA)	Sec.	484A(b)(2)
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