:: Federal Loans ::Quick Content Links
- What types of federal student loans are available?
- How do I apply for a federal student loan?
- How do I get my loan once my eligibility is confirmed?
- How much money can I borrow to help pay for my education?
- Additional borrowing tips
- If federal loans aren't enough, what about private loans?
What types of federal student loans are available?
A college education is an investment in your future. While it's best to use as much savings or free financial aid as possible, you may still need to borrow money to pay for your education. Fortunately, federal loans are available to help manage the cost. There are three types of federal loans:
- Direct subsidized loans are low-interest loans based on financial need. Interest is paid by the federal government while you're in school at least half-time, during the six-month grace period after graduation or if you drop to less than half-time enrollment, and during specified loan deferment periods. For loans made on/between July 1, 2012 and June 30, 2014, there is no subsidy during the grace period.
- Direct unsubsidized loans are low-interest loans not based on financial need. You're responsible for all interest accrued from the date the loan is disbursed. This includes the time you attend school, the grace period and any type of loan deferment.
- Direct PLUS loans are low-interest loans made to graduate and professional students, and to parents of dependent undergraduate students. PLUS loans aren't based on financial need. The borrower is responsible for all accrued interest.
Read our "Are You Looking for Money?" booklet PDF or contact your financial aid office for more information about federal loans.
How do I apply for a federal student loan?
To get a federal Stafford loan, you must attend an eligible school at least half-time and be a U.S. citizen or an eligible non-citizen. To apply for a federal student loan and other federal aid and grants, you must complete the Free Application for Federal Student Aid (FAFSA). You can get the details about the FAFSA by visiting our 'Applying for Aid' page.
How do I get my loan once my eligibility is confirmed?
If you're eligible for a federal loan, you'll receive a Master Promissory Note (MPN), which is a legal agreement of repayment. You may be eligible to receive multiple loans under one MPN for a maximum 10-year period and you may get your MPN in a paper or electronic format. After your loan is approved, the loan funds are sent to your school.
How much money can I borrow to help pay for my education?
The amount you can borrow depends on several factors, including your level of financial need, other sources of aid, cost of attendance and the length of your school's academic year. More specific information can be found on the Federal Student Portal's Loan Limit Chart (external link).
Additional borrowing tips
- Complete the FAFSA as soon as you can after Jan. 1 each year.
- Exhaust all grant and scholarship options before considering a federal student loan.
- If you do borrow, exhaust all your federal student loan options before considering non-federal alternative or private loans, and avoid putting college expenses on a credit card.
- Borrow only what you need to pay school expenses.
- Notify the Department of Education about any changes in your address, school enrollment status or ability to repay.
- Know your rights and responsibilities as a borrower.
- Keep copies of all loan correspondence.
- Make your loan payments on time.
- Don’t be afraid to ask questions.
If federal loans aren’t enough, what about private loans?
Many lenders offer loans outside the federal loan program called "alternative" or "private" loans. These loans allow students or parents to borrow money to cover the gap between the cost of education and the amount of financial aid received in the form of grants, scholarships and federal student loans. Eligibility requirements, terms and conditions for these loans vary by lender.
Since "alternative" or "private" loans can have higher interest rates and may offer fewer flexible repayment options, borrowers should consider them only after they’ve exhausted all of their federal loan options. Learn more by downloading our publications about private loans.
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