Federal Student Loans

Federal Student Loans

In order to promote education, U.S. Government thorugh Department of Education and other institutions offers several types of Federal Student Loans. 

Direct Loan

U.S. Department of Education's Direct Loan Program provides loans to help students pay for education after high school.  It provides funds for Stafford loa­ns and PLUS loans in the same amounts as the Stafford and
PLUS loans offered through the Federal Family Education Loan Program (FFEL).  Direct Loans not only come up with low interest rates but also can be consolidated for one low payment after the graduation.

Types of Direct Loans

Subsidized Direct Loans

A loan in the amount of $3,500 to $8,500, depending on grade level is made which must be repaid by the student.  The U.S. Department of Education pays interest while the student is in school and during grace and deferment periods. The student must be at least a Half-time student and have financial need.

Un-Subsidized Direct Loans

A loan in the amount of $3,500
to $20,500, depending on grade level is made which must be repaid by the
student.  The student pays interest while still in school and during grace and deferment periods. The student must be at least a Half-time student. Student doesn't need to demonstrate the financial need.

Plus Loans

A loan is issued in the amount of cost of attendance minus any other financial aid the student receives. There is no minimum award amount.  This loan is available only to parents of dependent undergraduate students and graduate and professional students enrolled at least Half-time. Students do not need to demonstrate a financial need.  These loans are unsubsidized and interest must be paid by the student or the parent during the life of the loan including while the student is till in college.

Other Types of Federal Student Loans

Perkins Loan

A loan in the amount of $4,000 is issued to undergraduate students and $6,000 to graduate ­and professional degree students.  There is no minimum award amount. Students are charged 5 percent interest.  This loan sponsored by Depart of Education and made by individual schools.  Students are required to make payments to the school that made the loan.