A federal student loan is a loan made by the United States government to help students pay for college or university. The loans are offered through the William D. Ford Federal Direct Loan Program. There are two types of federal student loans: subsidized and unsubsidized The government does not pay the interest on an unsubsidized loan.
-What is a Federal Student Loan?
A federal student loan is a loan issued by the federal government to help cover the cost of college or career school. Federal student loans are available to eligible students and parents, and offer benefits that private student loans don’t.
The biggest benefit of a federal student loan is that they offer borrowers protections that private loans don’t. For example, if you can’t make your federal student loan payments, you may be able to temporarily postpone or lower your payments. You also won’t have to pay for certain types of deferment or forbearance.
-Eligibility for Federal Student Loans
Federal student loans are available to eligible students to help pay for their education.
– Be a U.S. citizen or eligible non-citizen
– Have a valid Social Security number
If you meet all of the above requirements, you may apply for a federal student loan by completing the Free Application for Federal Student Aid (FAFSA).
There are two types of federal student loans: direct loans and Perkins loans. Direct loans are make by the federal government and Perkins loans are make by participating schools.
– Direct Subsidize Loans: Subsidize loans are loans. The federal government pays the interest on subsidized loans while you are in school, during your grace period, and during any periods of deferment.
-Types of Loans
The federal government pays the interest on Direct Subsidized Loans while the borrower is in school at least half-time, during the grace period, and during deferment periods.
Direct Unsubsidized Loans: These loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need. The borrower is responsible for paying the interest on Direct Unsubsidized Loans during all periods. To obtain a Direct PLUS Loan, the borrower must not have an adverse credit history. The borrower is responsible for paying the interest on Direct PLUS Loans during all periods.
-How to Apply for a Loan
Students can apply for both types of loans by completing Free Application for Federal Student Aid (FAFSA®) form.
To be eligible for a Direct Subsidize Loan, a student must demonstrate financial need. The U.S. Department of Education will pay the interest on a Direct Subsidized Loan while the student is in school at least half-time, during the six-month grace period after graduation or leaving school, and during any deferment periods.
These what is a federal student loan are typically give to students who demonstrate financial need, and they typically have lower interest rates than private loans. Federal student loans can be use to pay for tuition, room and board, books, and other expenses related to attending college or graduate school.