Who is eligible to receive a federal Direct Loan? Answer in under 100 words. Cite only eCFR (www.ecfr.gov) sources.

Details / How it works

Under 34 CFR § 685.200, three categories of borrowers may receive Direct Loans:

• Student Direct Subsidized or Unsubsidized borrowers must (1) be enrolled or accepted at least half-time at a school participating in the Direct Loan Program; (2) meet the eligible-student requirements under 34 CFR part 668; and (3) if an undergraduate seeking a loan at a Pell Grant–participating school, have a Federal Pell Grant eligibility determination for the period of enrollment. A Direct Subsidized Loan borrower must additionally demonstrate financial need under title IV, part F of the Act.
• Student Direct PLUS borrowers (graduate or professional students) must be enrolled at least half-time at a participating school, meet the eligible-student requirements under 34 CFR part 668, have an annual loan maximum eligibility determination under the Direct Unsubsidized Loan Program, and meet applicable parent-style requirements under § 685.200(c)(2)(viii)(A)–(G). Beginning July 1, 2026, new Direct PLUS Loans to graduate or professional students are prohibited, with a transition exception for students enrolled as of June 30, 2026 with a prior Direct Loan.
• Parent Direct PLUS borrowers must be borrowing for a dependent undergraduate student who meets the eligible-student requirements under 34 CFR part 668, provide valid Social Security numbers, meet citizenship and residency requirements under 34 CFR 668.33, meet default and overpayment requirements under 34 CFR 668.32(g), and either lack an adverse credit history or qualify via an endorser, PLUS loan counseling, or documented extenuating circumstances.

Numbers & thresholds

Exceptions & edge cases

• Prior total and permanent disability discharge: A borrower whose prior Title IV loan or TEACH Grant service obligation was discharged for total and permanent disability must obtain a physician's certification that they are able to engage in substantial gainful activity and sign a statement acknowledging that the new loan (and any resumed-payment loan) cannot be future-discharged for the same impairment unless it substantially deteriorates (§ 685.200(a)(1)(iv)(A)).
• Three-year repayment resumption rule: If a new Direct Loan (other than a Direct Consolidation Loan) is received within three years of a prior disability discharge (request received on or after July 1, 2010), the borrower must resume repayment on the previously discharged loan or re-acknowledge the TEACH Grant service obligation (§ 685.200(a)(1)(iv)(B)).
• Conditional pre-7/1/2010 discharges: Different certification and acknowledgment requirements apply where collection suspension must be lifted (§ 685.200(a)(1)(iv)(C)).
• Transition exception for graduate/professional PLUS: Students enrolled as of June 30, 2026 with a prior Direct Loan for the same program retain PLUS eligibility through their expected time to credential; if they withdraw or cease enrollment, the July 1, 2026 limitation applies (§ 685.200(b)(2)(ii)–(3)).
• Ability-to-benefit: Students without a secondary school credential who enrolled in a program of study before July 1, 2012 must satisfy 34 CFR 668.32(e)(2)–(5) (§ 685.200(a)(1)(v)).
• Fraud convictions: A parent who has been convicted of, or pled nolo contendere or guilty to, a crime involving fraud in obtaining Title IV, HEA program assistance must complete repayment of such assistance to remain eligible for a Direct PLUS Loan (§ 685.200(c)(2)(vii)).
• No credit history is not adverse credit: The Secretary will not deny a Direct PLUS Loan solely because the parent has no credit history (§ 685.200(c)(2)(viii)(F)).
• Defaulted Perkins, FFEL, or Direct Loan borrowers: Must make satisfactory repayment arrangements, as defined in § 685.102(b), before receiving further Direct Loans (§ 685.200(d)).