Students: Federal Student Loans
KB0010602
This article provides general federal loan information that is required by the Department of Education.
Federal Student Aid / Loans
httpThe main website for Federal Financial Aid is https://www.studentaid.ed.gov/
Will you need a loan to attend college? If so, think federal aid first. Federal student loans usually offer borrowers lower interest rates and have more flexible repayment terms and options than private student loans.
What is a federal student loan?
Federal loans are borrowed funds that you must repay with interest. A federal student loan allows students and their parents to borrow money to help pay for college through loan programs supported by the federal government.They have low interest rates and offer flexible repayment terms, benefits, and options.What is a private student loan?
A private student loan is a nonfederal loan issued by a lender such as a bank or credit union. If you're not sure whether you're being offered a private loan or a federal loan, check with the financial aid office at your school.Why are federal student loans a better option for paying for college?
Federal student loans offer borrowers many benefits not typically found in private loans. These include low fixed interest rates, income-based repayment plans, cancellations for certain employment, and deferment (postponement) options, including deferment of loan payments when a student returns to school. Also, private loans usually require a credit check. For these reasons, students and parents should always exhaust federal student loan options before considering a private loan.
What kinds of federal student loans are available?
...
Federal Perkins Loan
...
For undergraduate and graduate students
Funds depend on student's financial need and availability of funds at the college
College is the lender; payment is owed to the college that made the loan
...
Undergraduate students: up to $5,500
Graduate and professional degree students: up to $8,000
...
Direct Subsidized Loan
...
For undergraduate students who are enrolled at least half-time* and demonstrate financial need
Student is not charged interest on the loan while in school and during deferment periods
The U.S. Department of Education (ED) is the lender; payment is owed to ED
...
Between $3,500 and $5,500 depending on year in school
...
Direct Unsubsidized Loan
...
For undergraduate and graduate students who are enrolled at least half-time*
Student is responsible for interest during all periods
ED is the lender; payment is owed to ED
...
Between $5,500 to $20,500 (minus any subsidized amount received for the same period) depending on year in school and dependency status
...
Direct PLUS Loan for Parents
...
For parents of dependent students
Dependent students must be enrolled at least half-time*
Parent must not have negative credit history
Parent is responsible for interest during all periods
ED is the lender; payment is owed to ED
...
Maximum amount is cost of attendance* minus any other financial aid the student receives
...
Direct PLUS Loan for Graduate or Professional Students
...
For graduate or professional degree students who are enrolled at least half-time*
If the student has not requested the annual maximum Unsubsidized Stafford Loan amount they are eligible for, the school must notify the student of this eligibility and give them the opportunity to request it
Student must not have negative credit history
Student is responsible for interest during all periods
ED is the lender; payment is owed to ED
...
gov/ and it includes information about Federal Student Loans.
Here is some of the information found on the federal website:
What types of federal student loans are available?
The U.S. Department of Education’s federal student loan program is the William D. Ford Federal Direct Loan (Direct Loan) Program. Under this program, the U.S. Department of Education is your lender. There are four types of Direct Loans available:
Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need.
Direct PLUS Loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify.
Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.
For all the details regarding Federal Student Loans please visit https://studentaid.gov/understand-aid/types/loans.