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Federal Student Loans

Federal Student Loans


A college education could be a major burden coming your way and yet a necessary expense that can be alleviated with the aid that Federal Student Loans can provide. These loans are not just aimed to low-income families that cannot afford to pay the high interest rates of private student loans and not even the low interest rates of a non-subsidized Federal Student Loan. However, many people do not know what financial aid the government offers to pay for higher education and where to apply. So with that said, let us go through a brief overview.

Types of Federal Loans

First off, when it comes to Federal Student Loans you should know that there is more than one type of loans students can apply for when needing financial aid. In fact, parents can also apply to obtain financial aid to get the money they need to pay for their children’s education. Available Federal Student Loans are:

•       Subsidized or Unsubsidized Stafford Student Loans, offered by both private lenders and the U.S. government

•       Direct Subsidized or Unsubsidized Student Loans, offered by the government to eligible students

•       Direct PLUS loans, which are federal loans for parents of undergraduate students

•       Direct Consolidation Loans, which are federal loans to consolidate several student loans into one

•       Federal Perkins Student Loans, which is a school-based federal program based on a fixed interest rate.

PLUS loans are not “extra” loans, but an acronym for Parent Loans for Undergraduate Students, so applying for these loans does not carry out additional benefits, but the opportunity for parents to get the money to pay college, university or a career school for their children.

Federal Financial Aid Limits

Applying for a federal loan can be a lengthy process and is subject to eligibility for most of the above types of loans. However, once approved, undergraduate students can borrow up to $5,500 per year from Perkins, $5,500 to $12,500 per year through Direct Subsidized Loans and Direct Unsubsidized Loans Direct PLUS loans require a credit check to determine the amount and approval. In addition, availability of funds at each college must be taken in mind besides eligibility.

Federal Student loans are an investment in your future, and you must not be afraid to apply for one, because these loans offer the best terms and lower interest rates than private student loans. You can also consolidate several federal, supplemental, federal nursing and health education assistance into one. On the other hand, Private Student Loans are not eligible for consolidation.