“Improving college access and afford

-

ability is key to giving more Americans a 

chance at higher education and keeping 

America competitive.”

 

 – U.S. Secretary of Education 

 Margaret Spellings

FEDERAL

AID

FIRST

PRESORTED 

First CLASS MAIL

U. S. POSTAGE 

PAID

CAPITOL HEIGHTS, MD

PERMIT NO. 557

U.s. Department of educationed pubsp.o. box 1398jessup, md 20794

Tips

to help you apply for

a federal student loan

1. Apply online using 

www.fafsa.ed.gov

2. Check deadlines. Be aware of your 

state’s and your school’s application 

deadlines. While there is no deadline 

for applying for federal student aid, you 

should apply as early as possible after 

January 1 of each year that you will at-

tend college. Some state and school aid 

is awarded on a first-come, first-served 

basis.

3. Collect the information you need 

to complete the FAFSA: 

•Your Social Security number and your 

 parents’ Social Security numbers;

•Your driver’s license number, if you 

 have one;

•Your alien registration number, if you 

 are not a U.S. citizen; and 

•Your federal tax returns and income 

 information. 

4. Check your FAFSA. After you 

complete the FAFSA, you will receive 

a Student Aid Report (SAR). Review 

the information carefully and make any 

necessary corrections.

5. Respond immediately to any re-

quest from your school for additional 

information.

 www.federalstudentaid.ed.gov
What is a federal student loan?

A federal student loan allows students and their parents to borrow money to help pay for college 

through loan programs supported by the federal government. They usually have low interest rates 

and offer attractive repayment terms, benefits and options. Generally, repayment of a federal loan 

does not begin until after the student leaves school. Federal student loans can be used to pay school 

expenses such as tuition and fees, room and board, books, supplies and transportation. 

Federal student loans are delivered to students through two programs: the Direct Loan Program and 

the Federal Family Education Loan Program. Both programs offer essentially the same type of loans 

with similar loan terms and borrower benefits. Your school chooses the loan program in which it will 

participate. In both programs, loan funds are provided to you through your school.

What is a private student loan?

A private student loan is a nonfederal loan issued by a lender such as a bank or credit union. Private 

student loans often have variable interest rates, require a credit check and do not provide the benefits 

of federal student loans. 

Why are federal student loans a better option for paying for college?

Federal student loans offer borrowers many benefits not typically found in private loans. These include 

low fixed interest rates, income-based repayment plans, loan forgiveness and deferment options, including deferment of loan payments when a student returns to school. For these reasons, students and 

parents should always exhaust federal student loan options before considering a private loan. 

How do I get a federal student loan?

To get a federal student loan, you must complete the Free Application for Federal Student Aid 

(FAFSA). The easiest way to complete the FAFSA is online at www.fafsa.ed.gov. Here, you identify schools that you are interested in attending. When your FAFSA is processed, the schools you 

have identified will receive your information. The school will then tell you how much financial aid is 

available, including grants, scholarships, work opportunities and federal student loans. Should you 

choose a federal student loan, your school will provide you with instructions on next steps, including 

how to select a lender.

How much money can I borrow in federal student loans?

Undergraduate student loan limits range from $3,500 to $10,500 per year depending on certain 

factors, including the student’s year in college. Graduate students can borrow up to $20,500 each 

year. Parents can also get federal student loans to help pay the remainder of college costs that are not 

covered by their children’s other financial aid. These are called PLUS loans. In addition, graduate 

students may obtain PLUS loans to help pay for their own education.

Why should IcompleteaFAFSAwhentheprivateloanapplicationprocess may beeasier?

While the application process may be easier in some instances, federal student loans usually have 

lower interest rates and better repayment terms and options than private student loans. Additionally, 

schools use the information provided on the FAFSA to determine eligibility for other types of financial aid provided by the federal government, from your state, or from the school itself. This aid can 

include grants, scholarships and work opportunities.

What kinds of federal student loans are available?

Stafford loans are for undergraduate and graduate students. There are two types of Stafford 

loans: subsidized and unsubsidized. 

•Subsidized Stafford loans provide low interest rates and are available to students who 

demonstrate financial need based on income and other information provided on the FAFSA. 

A credit check is not required to receive these loans. The federal government pays the interest on 

these loans until six months after the student is no longer enrolled in school at least half time. 

	 •Unsubsidized Stafford loans provide low interest rates and are available to all students 

regardless of financial need (although the FAFSA still must be filed). A credit check is not

required to receive these loans. The student is responsible for the interest, which may be paid

 while the student is in school or accrued and then added to the principal balance when the 

student enters repayment, which occurs six months after the student is no longer enrolled in 

 school at least half time. 

Plus loans are low interest loans that parents can obtain to help pay the cost of education for 

their children. In addition, graduate students may obtain PLUS loans to help pay for their own education. PLUS loans require a credit check and, in some instances, an eligible cosigner. Repayment 

of PLUS loans begins following the final disbursement for the year. Graduate students may be able 

to defer repayment of their PLUS loans until after the student is no longer enrolled in school at least 

half time, although interest will continue to accrue. 

 

Consolidation loans allow student or parent borrowers to combine multiple federal student loans 

into one loan with one monthly payment. A federal consolidation loan cannot include private loans. 

However, some private lenders may offer consolidation loans. Borrowers should be aware that they 

will lose their federal borrower benefits if they consolidate their federal student loan into a private 

consolidation loan. Borrowers should always exhaust federal student loan options first before considering a private consolidation loan. 

• Allow students and their parents to borrow money to help pay

for college through programs

supported by the federal government. 

• Offer lower interest rates and

better repayment benefits and options than private student loans.

• Are available to students and

parents who need help paying for

college—in many cases, regardless of income level or credit history.

Students and parents should always exhaust federal student loan 

options first before considering a 

private loan. To apply for a federal 

student loan, complete our online 

tool, the Free Application for Federal Student Aid (FAFSA), at www.

fafsa.ed.gov.

For additional information on 

the federal student aid programs, 

consult the Department of Education’s free publication Funding 

Education Beyond High School: 

The Guide to Federal Student Aid, 

which may be obtained by visiting

www.federalstudentaid.ed.gov/pubs 

or calling 1-800-4-FED-AID.

Federal

Student Loans

T hinking about attending college? Will you need a loan? If so, think Federal Aid First! Federal loans usually offer borrowers 

lower interest rates and have more flexible repayment options than loans 

from banks or other private sources. 

This brochure explains the differences between federal and private education loans, the various kinds of federal loans offered and the dollar 

amounts available. Included are details on the Free Application for 

Federal Student Aid (FAFSA)—your starting point for obtaining financial assistance for college. Think Federal Aid First!

For additional copies of this brochure, visit www.edpubs.org 

or call 1-877-4ED-PUBS (1-877-433-7827).