Federal Student Loans Overview

Federal student loans supply financial help for students enrolled at schools that participate in federal aid programs. These loans are offered by private organizations under accordance from the U.S. Department of Education through the Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan Program (FDLP).

Whereas alternative student loans can be used for any expense, federal student loans generally cover school expenses, including tuition and fees, room and board, books and school supplies, as well as any transportation. Loans can also help pay for technology needs (i.e., a computer) and for necessary dependent care.

Federal Stafford Student Loans

Stafford Student Loans are federal loans made to college and university students to supplement personal and family resources, scholarships, grants, and work-study. They may be subsidized by the U.S. Government or may be unsubsidized depending on the student's financial need.

Click Here to Apply for the Stafford Loan

Both subsidized and unsubsidized federal student loans are guaranteed by the Department of Education either directly or through guarantee agencies. Nearly all students are eligible to receive a Stafford Student Loan regardless of credit score or other financial issues. Both types offer a grace period of six-months, which means that no payments are due until six-months after graduation or three months after the borrower becomes a less-than-full-time student without graduating. Both types have a fairly modest annual limit. The limit for the academic year beginning in 2007 is $3,500 per year for freshman undergraduate students, $4,500 for sophomore undergraduates, and $5,500 per year for junior and senior undergraduates.

Parent PLUS Student Loans

The Parent PLUS Student Loan is available to parents of students enrolled at least part-time in a program included within a formal list of participating post-secondary institutions. PLUS loans differ from other federal student loans like the Stafford and Perkins loans in that it can cover a larger amount of the cost of education, has a higher interest rate and the commitment is undertaken by the parent, rather than the student. PLUS Loans are also available for graduate and professional students.

Apply for the Parent PLUS Loan

Graduate PLUS Loans

The Graduate PLUS Loan is similar to the Parent PLUS Loan in the way it is an unsubsidized, federally guaranteed loan, up to the cost of education. This loan is taken out in the graduate student's name, on their own signature and credit rating. Federal loan deferment and forbearance options are the same as the Stafford Loan so graduate and professional students can postpone repayment while enrolled at least half-time in a degree or certificate program.

Apply for a GradPLUS Loan

Federal Student Loan Consolidation

After graduation, many students have a series of federal student loans (and payments), through the Stafford, PLUS or Perkins programs. When you consolidate federal student loans into one single loan you realize a reduced monthly payment (up to 53% less), a longer repayment term, and a fixed interest rate. To consolidate federal student loans, visit: federal or private student loan consolidation.

Apply for a Federal Consolidation Loan

Federal Perkins Loan

The Perkins Loan is a low-interest federal student loan for undergraduate and graduate students. In the case of Perkins Loans, the college acts as the lender, drawing funds from a small pool of money provided by the federal government. Perkins Loans are awarded based on exceptional financial need.

Finding Scholarships

Last year, there was over $31 billion in unmet financial need. You don't need to be one of the students who don't get all the financial aid they need. Search for scholarships for yourself and feel free to submit links to those that you find on your own. Visit Student Scholarship Search for more information.

Start Building Credit

Building a good credit rating can help you secure lower interest rates for private student loans, if your federal student loans do not cover all of your expenses. Opening a student credit card with small credit limit is a great way to start building credit history.