Federal student loans are part of the educational journey of many students through undergraduate and graduate schools. Unlike private student loans, federal student loans are granted through the government. There are two main categories of federal student loan programs: the Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan Program (FDSLP), which is also known as the Federal Direct Loan Program. These programs include several loans which are available through the financial aid offices of schools, courtesy of the US Department of Education. They include the Federal Stafford Loans, Parent PLUS Loans, Graduate PLUS Loans, Perkins Loans, and Consolidation Loans. The Federal Family Education Loan Program (FFELP) is the more popular type of federal student loan programs. The loans are provided by private lenders but are guaranteed by the government. The Federal Direct Loan Program, on the other hand, provides funds directly from the government to students or parents. Federal student loans are considerably affordable. Students with private loans usually pay high variable interest rates and fees. Federal student loans go by a low interest rate and allow deferred payments. Plus, after graduation, federal student loans can be consolidated. The resulting Consolidation Loan grants even more affordability and benefits. Therefore, it is recommended to try getting a federal student loan first; if that does not work out, then a student can turn to other options like scholarships. The last option should be a private loan—because this can be quite costly. In order to apply for federal student loans, a student must complete and submit the necessary form called the Free Application for Federal Student Aid (FAFSA). This can be done online or through the financial aid office of the school. The US Department of Education takes the information provided on the completed FAFSA and decides which type of federal student loan would best benefit the student. A special formula, which was created by Congress, helps summarize a student’s financial needs. Factors that are considered include the income and assets (if applicable) of the student and parents, total number of family members, number of family members attending postsecondary schools, dependent or independent status of the student, and more. Federal student loans are not available for dependent students with families that can afford to cover the tuition. When the information on the FAFSA is formulated by the government, a Student Aid Report (SAR) is sent to the student or an Institutional Student Information Record (ISIR) is sent to the school. It is up to the school to choose the federal student loan program for the student: Federal Family Education Loan Program (FFELP) or the Federal Direct Loan Program. The student can either accept or deny the recommended loans of the school. Acceptance means signing a master promissory note (MPN). It is up to the financial aid office at the school to decide the amount of federal student loans that can be granted to students, but it is up to the students to see that the federal loans are paid on time.
» The Perkins Loan
» Federal Family Educational Loan Program (FFELP)
» Federal Stafford Loans
» Federal Direct Loan Program
» Parent Loans for Undergraduate Students (Parent PLUS)
» Graduate PLUS Loans
» Consolidation Loans