How Many College Student Loans Are There?
Federal programs are the single largest kind of college student loans. The two main programs are the Federal Family Education Student Loan Program (FFELP) and the William D. Ford Federal Direct Student Loan Program (FDLP).
You can apply for a FFELP college student loan through many private banks, credit unions, or education financial companies. Although your school may recommend specific institutions, you are still free to get your college student loan from any participating financial institution.
This college student loan has very attractive terms:
• You can get lower interest rates compared to other college student loans.
• Your interest payments may be paid by the federal government while you are still in school.
• You may not need to make student loan payments while you are in school.
• You can get longer repayment terms.
• You can benefit from flexible credit requirements.
Some schools participate in the Federal Direct Student Loan Program, where you get college student loans with the same terms as FFELP student loans, but you borrow from the U.S. Department of Education.
Below is a list of widely used federal educational student loans
• Federal Stafford loans
• Federal Perkins loans
• Federal PLUS loans
If you need a college student loan to fund your education, consider a Stafford college student loan. Stafford college student loans are the most common source of college loan funds. There are two types of Stafford college student loans:
• Subsidized college student loans are need based and interest will not accrue on the student loan while you are in school at least half time and during grace and authorized deferment periods. You do become responsible for the interest when you leave school and start paying back your college student loan.
• Unsubsidized college student loans are not need based, and you are responsible for all of the interest that accrues on the student loan, including while you are in school.
If you have not qualified for subsidized Stafford College Student Loans, or need more money than the subsidized program can offer, you might qualify for an unsubsidized Stafford college student loan, regardless of your family’s income. Except for the in-school interest provisions, both subsidized and unsubsidized Stafford college student loans have similar terms.
A Federal Perkins College Student Loan is a low interest (5%) college student loan for both undergraduate and graduate students with an exceptional financial aid need.
Federal criteria will include:
• Enrollment in an eligible school at least half time in a degree program
• U.S. citizenship, permanent residency, or eligible non citizen status
• Maintain satisfactory grades and progress
• No unresolved defaults or overpayments owed on Title IV educational student loans and grants
• Satisfaction of all Selective Service requirements
The U.S. Department of Education will provide a programmed amount of funding to your chosen school. In turn, the school will determine which students have the greatest financial need. The school will combine federal funds with some of its own funds for college student loans to qualifying students. To apply for this college student loan program, the student must complete the FAFSA.
Your school will pay you directly or apply your student loan to your school charges. You will receive the student loan in at least two payments during an academic year.
Perkins college student loans share many of the characteristics of subsidized Stafford college student loans. The most notable differences are lack of fees and a longer grace period.
The federally sponsored Parent PLUS College Loan is a low interest college student loan for parents of undergraduate, dependent students. With a Parent PLUS loan, families can fund the entire cost of a child’s education (less any other financial aid).
Parent PLUS College Loans are available regardless of the income or assets, and no collateral is required. While your parents do not have to prove financial aid need, a credit check will be required.
