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Applications for Federal Direct Loans are funded through the U.S. Department of Education. Interest rates are variable and are established by the Federal Government. Usually the interest rates are very low. Three programs exist - Federal Subsidized Direct Loans, Federal Unsubsidized Direct Loans, and Federal Parent PLUS Loans.
Direct Subsidized Loans are available only to undergraduate students who have demonstrated financial need. The U.S. Department of Education pays the interest on a Direct Subsidized Loan
- while you’re in school at least half time,
- for the first six months after you leave school (referred to as a grace period), and
- during a period of deferment (a postponement of loan payments).
Direct Unsubsidized Loans are available to undergraduate, graduate, or professional degree students enrolled at least half time at a school that participates in the Direct Loan Program. Financial need is not required to qualify. The borrower is generally responsible for paying all the accumulated interest until the loan balance is paid off.
https://studentaid.gov/help-center/answers/article/what-is-difference-between-direct-subsidized-loan-and-direct-unsubsidized-loan