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The Stafford loans are also available to graduate and undergraduate students. The amount dispersed depends, however, on grade level in school and the dependency status of the student. These loans generally are handed out through banks, credit unions or participating private lenders. Direct loans are given by the U.S. Department of Education. The PLUS loan, available to parents, has no dollar-amount limit. The loan is determined by the cost of attendance at the student's school subtracted by any other aid received by the child. This resulting difference then becomes the maximum dollar amount of the PLUS loan. The PLUS loan is similar to the Stafford loan in that it is lent by banks while Direct loans are provided by the Department of Education. Although these types of loans alleviate some of the stress of paying for college in the short term, they must be paid back after school and accrue interest after the education period ends.
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