Federal Student Loan Program Information

Federal loans offer financial help to the students enrolled in the school that participates in the federal aid programs. All the school expenses such as tuition fess, books, room, school supplies and transportation is covered in the federal student loan program.

Types Of Federal Student Loan Programs

Stafford loans are the federal student loans programs that are made available directly to the student, and are used to supplement the scholarships, work-study, grants, and personal and family resources. These loans may be subsidized or unsubsidized by the US Government, depending upon the financial need of the student. But, both subsidized and unsubsidized loans are guaranteed by Department of Education. This is done either directly, or through guarantee agencies.

Stafford loans can either be FFELP (Federal Family Education Loan Program), which are provided by private lenders, such as loan association, credit unions and banks, or they are FDSLP (Federal Direct Student Loan Program), which is provides to the students and their parents directly by the US Government.

Another federal student loan program is Parent Plus loan, which is available to parents of the students who are enrolled in a program that is included within the formal list of participating post-secondary institutions. Plus loans cover higher amount of total cost of education, and they also have higher rate of interest, and the parents, not the student, take commitment. Plus loans are available for professional and graduate students.

Graduate PLUS loan is another federal student loan program which is similar to the parent plus loan, and is federally guaranteed unsubsidized loan up to the total cost of education. The loan is taken on the name of the graduate students, with their own signature and credit rating.

For undergraduate and graduate students, Perkins Loan is another type of federal student loan program. Here, the college is the lender, and it draws funds from the small pool of money that is provided by the federal government. These loans are given based only on the exceptional financial need.

Applying For A Federal Student Loan Program

To get the direct student loan, students must submit a FAFSA (Free Application for Federal Student Aid), even though unsubsidized loan is available to all the students irrespective of their financial needs. Each federal student loan program has it own advantages and disadvantages, and must be carefully analyzed to choose the best option.

If federal student loan programs are not able to meet your borrowing needs, there are many other supplemental programs available known as private or alternative loans. There are also parent loans available to the parents of undergraduate students.