Federal Student’s Loans

Federal student loans are offered by the government to assist parents and students in catering for college and university education. They are unique compared to other types of loans, such as personal loans or car loans, in that they are flexible, making it easier to repay. One is not expected to repay the loan while enrolled in school or right away after clearing from school. Instead, one is given a six months grace period before you can start making payments. It is free to apply for a federal student loan.

Types of student loans

There are different types of student loans. These loans are given through the Federal Direct Loan Program and they have several benefits over private student loans. These types of student loans include include:

  • Direct subsidized loans student loans
  • Direct unsubsidized loans student loans
  • Direct PLUS loans. They are of two categories: Grad PLUS loans that are given to students and Parent PLUS loans that are given to student’s parents.
  • Direct consolidation loan for students.

1. Direct Subsidized Loans

These loans are given to students with financial needs, as stated by the federal regulations. The loan does not attract any interest while the student is in school or during the deferment period or the grace period. Once the student has left school, a grace period of six months is given. After the grace period, the student is expected to repay the principal and the interest of the loan.

2. Direct Unsubsidized Loans

These loans are given to federal students and they are not based on financial needs of the student. The amount you receive is determined by the school, which states the cost of attendance and other expenses involved in the course of your study. The loan attracts interest from the day you start receiving it. This means that interest accumulates while you are in school, during the grace period and even when you have deferred. This adds up to the total cost of the federal loan.

3. Direct PLUS Loans

These are federal loans advanced to students and parents of dependent students. The school estimates the annual school attendance costs you will incur after you have depleted other financial aids. The loan accumulates interest for all periods, thereby increasing the total federal loan cost.

4. Direct Consolidation Loan

This loan enables one to combine one’s all eligible loans into a single loan. It means that based on the agreement, the borrower will service the loans together.

Benefits of Federal Student’s Loans

  1. They are flexible. Compared to private loans, federal loans are flexible since a student can change the repayment option. Besides, some student loans do not attract interest during the grace period and deferment period.
  2. Payments are based on your salary. Some student loans have payment caps based on the borrower’s income. This makes it convenient since the borrower can repay the loan without draining his financial ability.
  3. Student loans do not require strong credit scores to qualify for the loan. Unlike private student loans, federal student loans usually do not require one to have strong credit scores. It makes it possible for students with financial needs to benefit from the loans.
  4. They do not need a cosigner. Most of the federal student loans, such as Direct PLUS loans, do not consider borrower’s credit and therefore, a cosigner is not needed.

How to Apply for Federal Student’s Loan

It is free to apply for a federal student loan. Before applying for the loan, one must sign a master promissory note as a way of agreeing to the terms and conditions of the loan. Besides, you also need to complete an entrance counseling form that is used to help you understand your obligation in the loan repayment.

The application process involves filling in the Free Application for Federal Student Aid (FAFSA). The FAFSA then determines if one is eligible for the aid such as grants. FAFSA has to be filled and submitted every year of your college so that you can keep on receiving the funding.

To make the process easier and fast, you can fill in the form online upon which the application will be processed within 3-5 days. It is also possible to apply by mail which takes 7-10 days to be processed. The application process is free. Therefore, if you are asked to pay a fee, know you are in the wrong place.

The schools you gave included in the FAFSA will have access to the information that you stated. They use it to determine the amount of loans and grants you can get. The amount one receives varies from one school to another, depending on the cost of attendance. The amount advanced also depends if you are a graduate, a parent, or a professional student.


Just like any other loan, federal student loans usually have an interest. However, they are better compared to private loans since they are flexible and have better repayment options. Both parents and students can benefit from the loan. If you are considering taking student loans, make sure to apply for a Federal Student Loan.

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