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Federal Loans from College Students

For students who have exhausted all of the opportunities provided by free scholarships and grants, investigating federal student loans is the most appropriate second step in the process of financing a college ducation.

Federal student loans are the largest source of college education loans in the nation, far more popular than any fashion of private loans.

Most experts encourage parents and students to maximize federal loans before even considering alternative types of private financing options.



Federal Student Loans Overview

Federal student loans, unlike grants, scholarships, and work-study, are borrowed money that must be repaid in full with interest. Students cannot have these loans forgiven if they do no finish their education, can't find a job upon graduation, or a struggling financially in your first career. Federal loans, like all other loans, are legal obligations.

On the bright side, student loans available through federal programs have very attractive terms - especially in comparison to most alternative borrowing options.

These federal student loans typically maintain lower interest rates that are set by the government, include the ability to postpone making payments, incorporate longer repayment terms, and have less stringent credit requirements.


Recent News about Federal Student Loans:

Types of Federal Student Loans

Federal Perkins Loans are made through participating schools to undergraduate, graduate and professional degree students. They are only offered to students who demonstrate financial need and are enrolled full-time or part-time. Federal Perkins Loans are repaid to your school.

Stafford Loans are offered to undergraduate, graduate and professional degree students. There are two types of Stafford Loans: subsidized and unsubsidized. A student must show financial need in order to receive a subsidized Stafford Loan, of which the U.S. Department of Education will pay (subsidize) the interest that accrues during certain periods. Proving financial need is not required to obtain unsubsidized Stafford Loans, however students are responsible for paying all interest that accrues on these unsubsidized loans.

PLUS Loans are specifically available for parents trying to help pay the cost of post-secondary education for their dependent undergraduate children. In addition, graduate and professional degree students may secure PLUS Loans to help pay for their own education, but only at the post-graduate education level.

Consolidation Loans allow student and parent borrowers the ability to combine multiple federal education loans into one over-arching loan with one monthly payment. Loan consolidation is a valuable tool for students that were forced to finance their education through a variety of means.

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