Federal Student Loans

Federal Student Loans Are Your Best Bet

The Federal government must be your absolute first source for college funding. Because Federal loans are funded by the Federal government, their interest rates are significantly lower than those on student loans made by private lending institutions. This makes them more affordable for students struggling to find the money to attend college or university.

Flexible Repayment Plans Make Repayment Easier

Unlike many private student loans, Federal loans do not come due for repayment until six to nine months after a student graduates or leaves college. This grace period is designed to allow students to find their feet financially before repayment begins. A student’s monthly payment and the length of the payment schedule is determined when the loan is initially approved. Federal loan payment plans include Standard, Extended and Graduated options. Parent PLUS and Grad PLUS loans are due for repayment as soon as the loans are full disbursed.

Applying For Federal Loans

The key to securing a federal loan for your college career begins with the FAFSA, the Free Application for Federal Student Aid. In fact, the FAFSA is the cornerstone to many other types of student aid, including state loans, college and university aid, and many scholarship and grant programs. When you file a FAFSA you are automatically considered for all Federal loans, grants and scholarships depending upon the financial information you provide. Almost every student qualifies for Stafford Loan aid in either a subsidized or unsubsidized loan. Because FAFSA is also used to determine other loans and need-based financial aid, you should file FAFSA as soon as possible, and at least before the earliest deadline of an aid source you are applying for.

After You File FAFSA 

The follow-up to the FAFSA is your Student Aid Report, or SAR. This report is generated by the government from the information you provide in your FAFSA, and it includes the government’s calculation of your Expected Family Contribution (EFC). After that, you will receive an award letter or aid package from the college or colleges you have chosen.

Federal Student Loans are Legal Commitments

It is very important that you take the loans seriously. Although it may be years before you begin repayment your financial future depends upon your diligence following repayment requirements and adhering to all of the loan terms.