#federal student loans
Federal Student Loans
Federal student loans are financing options provided by the federal government through the Department of Education. Federal student loans, like any loan you may borrow, must be repaid with interest. The good news is that student loans from the government offer low fixed interest rates and generous repayment terms. Be sure to take full advantage of these programs before using other financing options to pay for your higher education.
A Direct Consolidation Loan enables borrowers to combine all of their federal student loans into one federal loan consolidation is for student borrowers who are in repayment status or parent borrowers who wish to extend the repayment period on their current PLUS loans and obtain a fixed interest rate for those loans which might have a variable interest rate. You can combine all of your eligible federal student loans into one loan with a Direct Consolidation Loan. Consolidating also locks the interest rate you pay on your loan. In addition, by consolidating you can possibly lower your payments by extending the length of the repayment period for your loan. However, with the extended term, you will end up paying more in interest over the life of the loan.
Applying for Federal Student Loans
The FAFSA is the only application you need to file in order to be considered for federal student loans. You must meet the eligibility requirements to receive federal financial aid and must not be in default on any federal student loan or owe a refund of federal financial aid.
You will also have to sign a Master Promissory Note and complete a loan entrance interview session in person or online. Your school will provide you with this information and tell you what steps you need to take.
Most students end up needing to finance some portion of their education. Always maximize your use of funds you do not have to repay such as federal financial aid, institutional grants, scholarships. 529 plans, tuition remission, prepaid tuition plans, etc. Even if you or your family have very high income, you can still receive low cost federal student loan including an Unsubsidized Direct Student Loan and the Direct PLUS Loan for Parents. Graduate students can receive both the Unsubsidized Student Loan and Direct PLUS Loan for Graduate and Professional Students. To see all the ways you can use to pay for college, review our Financial Aid Flowchart
Of course, if you still need funding to pay for college beyond what you receive in free money and federal student loans, you can always pursue a private student loan.