Stafford Loans
This is the most widely used type of federal student loan. The Stafford Loan is available to both undergraduate and graduate students. There are two types of this federal student loan.
Federal Direct Loan
Federal Family Education Loan
There are also two sets of repayment guidelines.
Subsidized – demonstrated need for the loan. The borrower is not responsible for interest payments while attending school and the principle is deferred.
Unsubsidized – financial need is not demonstrated. While the principle is still deferred, the interest payments are not.
PLUS Loans
A PLUS loan is a federal student loan which is available to parents of dependant children who will be at least half-time undergraduate students in a participating school. This type of federal student loan is also available to graduate students and students working toward a professional degree. Some key points of this federal student loan are:
Financial need is not a requirement
PLUS loans are unsubsidized.
The individual taking the loan is responsible for the interest which accrues during the life of the loan.
The loan can cover up to the full price of attendance minus any other form of financial assistance.
Graduate and professional students receive an automatic deferment while in school.
Perkins Loans
A Perkins Loan is a federal student loan which has a low interest rate of 5%. The maximum loan amount is set to $4,000 for undergraduate students while graduate students can apply for $6,000.
General Requirements
In order to receive a federal student loan you need to meet a minimum set of requirements. These would be among them:
*Be a U.S. citizen or an eligible non-citizen
*Have a valid Social Security Number
*Register with Selective Service if you are a male between the ages of 18 and 25.
*Have a high school diploma or a GED (General Education Development) Certificate. You can also pass an approved exam of the U.S. Department of Education.
*Either be accepted or already enrolled as a regular student working towards a degree at a participating school.
*You can not have a drug conviction for any offense which occurred while receiving federal student aid of any type.
*You can not owe a refund or be in default of a federal student loan.
*You need to demonstrate financial need to qualify unless you apply for an unsubsidized Stafford Loan.
You need to be sure to find out which federal student loan programs are available at each school you are looking into. Not every school participates in every program. Also, when it comes to federal student loan consolidation, some lenders do not participate so you should check into this with the lender you are using.