Government Loan Programs

Go Government First

Low cost government student loans are the number one source of financial aid for college and university student. Loans from the Federal and state government should always be pursued before private loans because the interest rates are much more favorable, the repayment terms are more flexible, and the terms of the loan are more transparent. Most do not require a minimum credit score to qualify.

Types of Government Student Loans

The Federal government offers three types of student loans: The Stafford Loan, the PLUS Loan (for Parents and for graduate students) and the Perkins Loan. Graduating students can also take advantage of a Federal Consolidation Loan to combine all of their college loans into one manageable loan package.

 Federal Stafford Loan

Stafford Loans are the single most common type of student loan available. The Stafford Loan is so versatile because:


  • It is available to undergraduates and graduate students.
  • There is no financial need or credit score requirement to qualify for a Stafford Loan.
  • The Stafford comes in subsidized and unsubsidized versions. The subsidized Stafford Loan is reserved for students with the most need because the interest that accrues while the student is enrolled in college is paid by the federal government.  With the unsubsidized Stafford Loan, you are responsible for payment of monthly interest while in school though the principle is deferred until graduation.
  • Low interest rates.
  • Six-month grace period following graduation before repayment begins.

Federal PLUS Loan for Parents and Graduate Students

Parents PLUS and Grad PLUS are credit-based alternative loan programs designed for parents of dependent college students and for graduate students. Parents and grad students can secure a loan up to the value of the cost of their student’s attendance less any other financial aid awarded. Repayment of the PLUS Loan begins as soon as the loan is fully disbursed.

Federal Perkins Loan

The Federal Perkins Loan Program is designed for students who show exceptional financial need. The funding for this program comes from the Federal government and from the colleges themselves, and the individual colleges make the award. The secret for getting the most out of the Perkins program? Apply for your FAFSA early and apply to your college early. Colleges award loans to eligible students on a first-come,  first served basis, so you want to be as close to the front of the line as possible.

Federal Consolidation Loan Program

A consolidation loan enables graduates with one or more Federal student loans to combine all of them into one loan. This allows the student to reduce his loan payments to one more manageable monthly payment.

Applying for Federal Loans Is a One-Step Process

To applying for any government loan you must complete the Free Application for Student Aid (FAFSA). The FAFSA is required for all forms of Federal aid programs, and it is also required for state programs and for financial aid from colleges and universities. Whether you are applying for a Federal loan, grant or scholarship the FAFSA is your first step and must be submitted early to meet any deadlines for your loan or grant applications.

State Student Loans

All states have an extensive program of student loans, grants and scholarships. To find out what your state offers, go to the website of the state higher education authority. The site will have the links to the information you need. A list of the state authorities, their websites and contact information can be found on the Department of Education website at