Federal Student Loans

Federal student loans for college or career school are an investment in your future. You must repay your loan, so be sure you understand your options and responsibilities.

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If you apply for financial aid, you may be offered loans as part of your school’s financial aid offer. A loan is money you borrow and must pay back with interest.

If you decide to take out a loan, make sure you understand who is making the loan and the terms and conditions of the loan. Student loans can come from the federal government, private sources such as a bank or financial institution, or other organizations. Loans made by the federal government, called federal student loans, usually have more benefits than loans from banks or other private sources. Learn more about the differences between federal and private student loans.

What types of federal student loans are available?

The U.S. Department of Education’s federal student loan program is the William D. Ford Federal Direct Loan (Direct Loan) Program. Under this program, the U.S. Department of Education is your lender. There are four types of Direct Loans available:

• Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover higher education costs at a college or career school.
• Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need.
• Direct PLUS Loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify.
• Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.

For more information on Student Loans, please visit the Federal Student Aid website.