Federal student loans


Today, when the cost of college has skyrocketed to all-time highs, it becomes very difficult to plan your college career. You’re facing with a difficult battle. To pay for your education, you’ll probably need student loans to cover at least some of the cost.  

Fortunately, you have the opportunity to get a scholarship or grants that you don’t have to repay. Although this will help a lot, there is again a chance that you will need a loan to pay for all the expenses. You have two choices: federal loans and private ones.

The federal student loan is issued by the government. Allowing students and parents to borrow money for college directly from the federal government.  Because of this, it is a students’ first choice to pay for school.

Who Can Get Federal Student Loans

Federal Student Loans



The student attended a four-year college or university, community college, or career school can get federal students loans. So every student who meets these criteria can apply for federal student aid, which can be:

Grants, which don’t need to be paid back;

  • Work-study,( this part-time work that allows students to earn money while in school)
  • Federal student loans

Federal aid is decided on student financial need. To get this financial support student must submit the FAFSA and satisfy other basic eligibility requirements to qualify.

Parents may also apply for federal student loans, called Federal PLUS Loans. These loans can also be applied toward the student’s educational costs.

Types of federal student loans

There are three types of federal student loans available through the Federal Direct Loan Program:

  1. Direct Subsidized Loans
  2. Direct Unsubsidized Loans
  3. Direct PLUS Loans

These federal student loans offer different benefits than private student loans. You should always explore them first.

Direct Subsidized Loans

Direct Subsidized Loans are is intended for undergraduate students. The amount that you can borrow is determined by your school. That amount may not exceed your financial need. Maybe the best part of this loan is that the U.S. Department of Education pays the interest on a Direct Subsidized Loan.

They will pay interest while you’re in school at least half-time. Also for the first six months after you leave school and during a period of deferment.

Direct Unsubsidized Loans

These loans aren’t based on financial need. Like with Direct subsidized loans, school determines the amount you can borrow based. But here that depends on the cost of attendance and other financial aid you receive.

During all periods interest will be charged and will be capitalized. Unpaid interest will be added to a student loan current principal. This is also related to a period when you’re in school, during grace, and deferment periods. This significantly increases your total federal loan cost.

Direct PLUS Loans

Direct PLUS Loans are unsubsidized credit-based federal loans. Also, these loans are intended for parents of dependent students and graduate/professional students.

PLUS loans can help pay for education expenses up to the cost of attendance after your other financial aid is exhausted.

Interest is charged during all periods and will be capitalized. Because of this, you can expect to increase your total federal loan cost.

Note: Any funds you or your child receives must be used to pay the child’s educational expenses.

There are general requirements that must be fulfilled to apply for these loans:

  1. You must be a parent dependent student who works with degree or certificate
  2. You do not have a negative credit history

What is the difference between subsidized and unsubsidized student loans?

The major difference is that the federal government pays the interest for Direct Subsidized Loans while the student is in college or while the loan is in deferment. When we talking about Direct Unsubsidized Loan interest begins accruing as soon as the loan is taken out.

How to apply for federal student loans for college

The application process is easy and free.  All you need to do is complete the Free Application for Federal Student Aid (FAFSA). This will also help with other stuff because FAFSA  determines your eligibility for other federal student aid like grants and work-study.

To receive federal student aid, you need to submit the FAFSA every year you’re enrolled in college.

Fill the FAFSA form online. That is definitely easiest and fastest way. Your application will be processed within 3-5 days.

Another way is to mail in a paper application. In this case, processing will take about 7-10 days.

And remember – submitting the FAFSA is totally free. If anyone tries to charge you, it means something is wrong. Only submit your FAFSA at FAFSA.gov.

What happens after you submit the FAFSA

Federal Student loans Fafsa



After you finished submission of the FAFSA, you will receive a Student Aid Report (SAR), from the government. SAR gives you basic information about your eligibility for federal student aid.

The colleges you included on your FAFSA will have access to this information, and they’ll use it to determine the number of federal grants, work-study, and loans you may qualify for.

The colleges you’re accepted to will send you a financial aid award letter. In letter will be explained in detail about the financial aid you are eligible to receive. That include federal student loans, grants, and work-study.

The amount of federal aid you receive from each school can vary, just as the cost of attending each school varies.

Student Loan Servicers (Customer Service)

When you take a loan, it automatically deducts the loan serviceman. They will process your payments and help you by providing answers to your questions and giving you an advice on loan repayment.

How much can you get from federal student loans?

If you are an undergraduate student you can get $5,500 to $12,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans. That all depend on certain factors, including your year in college.

If you are a graduate student you can get up to Up to $20,500 each year in Direct Unsubsidized Loans.

Are federal student loans forgiven after 25 years?

According to Public Service loan forgiveness (PSLF), your loans are forgiven after 120 qualifying payment or 10 years. And according to an Income-Based Repayment plan, your loans will be forgiven after 20 or 25 years of qualifying payments. That all depending on when you initially borrowed.