Federal Loans. Federal Student Loans

Federal Loans!

Federal Student Loans

Do you need a Federal Student Loan For College?

Are you looking for federal loans, grants, or scholarships?

Federal Student Loans and Grants

The U. S. Government administers over 200+ major money programs for students which provide over $42 billion a year to help millions of students pay for the costs of college. Federal loans, grants, scholarships, fellowships, student loans, internships, work study programs, money to pay existing student loans, federal student consolidation loans...they're all available from a variety of programs administered by the federal government.

Here are the major federal loan and grant programs available for students.

Federal Direct Stafford/Ford Loans (Direct Subsidized Loans):

William D. Ford Federal Direct Loan Program is one among the three types of student loans avaliable through the federal government. Students must demonstrate financial need to receive this type of loan. (The school determines financial need based on the information provided on a financial aid application.) The federal government pays the interest on these loans while students are in school at least half time and during certain periods, such as grace and deferment.

A subsidized loan is awarded on the basis of financial need. If you're eligible for a subsidized loan, the government will pay (subsidize) the interest on your loan while you're in school, for the first six months after you leave school, and if you qualify to have your payments deferred. Depending on your financial need, you may borrow subsidized money for an amount up to the annual loan borrowing limit for your level of study (see below).

You might be able to borrow loan funds beyond your subsidized loan amount even if you don't have demonstrated financial need. In that case, you'd receive an unsubsidized loan. Your school will subtract the total amount of your other financial aid from your cost of attendance to determine whether you're eligible for an unsubsidized loan. Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it's paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest will increase the amount you have to repay.

You can receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as you don't exceed the annual loan limits.

Direct and FFEL Stafford Loans:

Direct and FFEL Stafford Loans are the Department of Education's major form of self-help aid. Direct Stafford Loans are available through the William D. Ford Federal Direct Loan (Direct Loan) Program and FFEL Stafford Loans are available through the Federal Family Education Loan (FFEL) Program. The major differences between the two are the source of the loan funds and the available repayment plans. Under the Direct Loan Program, the funds for your loan are lent to you directly by the U.S. government. If your school does not participate in Direct Loans, the funds for your loan are lent to you from a bank, credit union, or other lender that participates in the FFEL Program.

FFEL Stafford Loans:

FFEL is one among the three types of student loans available through the federal government. FFEL includes four components: Stafford Loan, Unsubsidized Stafford Loan, PLUS (Parent Loan for Undergraduate Students) Loan, and Consolidation Loan

Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans):

Students can get these loans regardless of financial need but will have to pay all interest charges.

Federal Direct PLUS Loans:

Parents of dependent students can get these loans to pay for their children's education. Parents are responsible for all interest charges.

Federal Perkins Loan Program:

A Federal Perkins Loan is a low-interest (5%) loan for both undergraduate and graduate students with exceptional financial need. Financial need is determined by the U.S. Department of Education, using a standard formula. Your school is your lender. The loan is made with government funds with a share contributed by the school. You must repay this loan to your school. Borrowers who undertake certain public, military, or teaching service employment are eligible to have all or part of their loans canceled.

Also Known As: Formerly National Defense Student Loans, National Direct Student Loan, and Perkins Loan Program

Federal Direct Consolidation Loans:

These loans combine one or more federal student loans in one new Direct Loan. Only one monthly payment is made to the U.S. Department of Education. In certain circumstances, students who have federal loans under the Federal Family Education Loan Program may consolidate them into Direct Loans.

Federal Pell Grant:

Does not have to be repaid. Pell Grants are awarded only to undergraduate students who have not earned a bachelor's or professional degree. (A professional degree would include a degree in a field such as medicine, law, or dentistry.) For many students, Pell Grants provide a foundation of financial aid to which other aid may be added.

Campus-Based Programs:

The three programs discussed in this section are called campus-based programs because they're administered directly by the financial aid office at each participating school. The Federal Supplemental Educational Opportunity Grant (FSEOG) Program awards grants; the Federal Work-Study Program offers jobs; and the Federal Perkins Loan Program offers loans. Even though each program is different, they have these characteristics in common:

How much aid you receive depends on such factors as your financial need, on the amount of other aid you'll receive, and on the availability of funds at your school. Unlike the Federal Pell Grant Program, which provides every eligible student with funds, each school participating in any of the campus-based programs receives a certain amount of funds from the federal government for each campus-based program each year. When that money is gone, no more awards can be made from that program for that year. Each school sets its own deadlines for students to apply for campus-based funds.

Federal Supplemental Educational Opportunity Grant Program:

A Federal Supplemental Educational Opportunity Grant (FSEOG) is for undergraduates with exceptional financial need--that is, students with the lowest Expected Family Contributions (EFCs) and gives priority to students who receive Federal Pell Grants. An FSEOG doesn't have to be paid back.

Federal Work-Study Program:

The Federal Work-Study Program provides jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. The program encourages community service work and work related to your course of study.