With the receipt of a valid FAFSA, there are essentially three types of federal direct loans which may be offered to an eligible student. The student's specific situation will determine which loan(s) they are offered as part of their financial aid package. Following is a brief description of each loan type: Subsidized: The federal government pays the interest for the student as long as the student is enrolled at least half-time in their degree program. A student must demonstrate financial need to be eligible for a subsidized loan (Cost of Attendance - FAFSA EFC - Other Student Aid). A subsidized loan is only available to undergraduate students. No penalty is incurred for early repayment. Unsubsidized: The student is responsible for the interest charges on this loan. Interest charges begin when loan funds are disbursed to the student's account, and continue to be charged until the loan is fully paid. NOTE: While enrolled at least half-time in their degree program, the student may either: a) pay the interest as they go; or b) allow the interest to accrue and when the loan goes into repayment, the accrued interest is capitalized and added to the loan principal amount. No penalty is incurred for early repayment. PLUS: This federal loan is available only to a parent of a dependent undergraduate student (as determined by the FAFSA) or to a graduate student. The borrower must not have an adverse credit history. If the borrower has an adverse credit history, he/she may still receive a PLUS loan by obtaining an endorser. A Parent PLUS loan cannot be transferred to the student. The parent borrower is responsible for repaying the loan. A Graduate PLUS loan is obtained by the student; therefore, the student is responsible for repaying the loan. See studentaid.gov for additional information on federal student loan programs. For specific information see the following loan types: Subsidized or Unsubsidized student loans PLUS loans