Types of Federal Student Loans
Here are some of the types of federal student loans available.
Types of loans:
• Federal Perkins Loans
Made through participating schools to undergraduate, graduate and professional degree students.
Offered by participating schools to students who demonstrate financial need.
Made to students enrolled full-time or part-time.
Repaid by you to your school.
• Stafford Loans
are for undergraduate, graduate and professional degree students.
You must be enrolled as at least a half-time student to be eligible for a Stafford Loan.
There are two types of Stafford Loans: subsidized and unsubsidized.
You must have financial need to receive a subsidized Stafford Loan however, financial need is not a requirement to obtain an unsubsidized Stafford Loan. The U.S. Department of Education will pay (subsidize) the interest that accrues on subsidized Stafford Loans during certain periods.
These loans are made through one of two U.S. Department of Education programs:
William D. Ford Federal Direct Loan (Direct Loan) Program.
Loans made through this program are referred to as Direct Loans. Eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Loans include Direct Subsidized Loans and Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. You repay these loans directly to the federal government.
Federal Family Education Loan (FFEL) Program.
Loans made through this program are referred to as FFEL Loans. Banks or private lenders provide funds that are guaranteed by the federal government. FFEL Loans include subsidized and unsubsidized FFEL Stafford Loans, FFEL PLUS Loans and FFEL Consolidation Loans. You repay these loans to the bank or private lender that made you the loan.
• PLUS Loans
are loans parents can obtain to help pay the cost of education for their dependent undergraduate children. In addition, graduate and professional degree students may obtain PLUS Loans to help pay for their own education. These loans are made through both the Direct Loan and FFEL programs mentioned above.
• Consolidation Loans (Direct or FFEL)
allow student or parent borrowers to combine multiple federal education loans into one loan with one monthly payment.
Important Note: Documents for federal student loans, from private lenders or the Department of Education, will state somewhere on the form that it is a federal student loan. Some private student loan lenders have forms that look similar to the federal forms and that might confuse some students.
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