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What are Federal Student Loans?

Also known as government loans, that  allow students and parents/guardians to borrow money for college directly from the federal government.

1. Subsidized Stafford

The Subsidized Stafford loan offers the lowest interest rate. Borrowers must meet a financial needs test to qualify. Graduate and professional students are not eligible for these loans.


Unsubsidized Stafford

Unsubsidized Stafford loans are made without regard to financial need.  That means any student can get one.



The schools that participate in the Perkins Loan program select the students who are eligible to receive these favorable loans from a limited pool of funds made available by the government. The student borrowers must prove financial need. The interest rate on these loans is set at a relatively low rate, and is paid by federal government while the student is enrolled in school.



PLUS Loans (Parents Plus) are available to parents with dependent undergraduate, graduate, and professional degree students. PLUS Loan applicants must have a qualifying  credit history.


Consolidation Loans

Consolidation Loans are available for borrowers with existing federal student loans (Direct or FFEL) in order to combine the loans and extend payment schedules and terms. A borrower’s existing loans are paid off and a new consolidation loan is created. Although the monthly payment amount on a consolidation loan usually is lower than for the combined existing loans, this benefit comes at the price of a longer repayment period. Interest rates for these loans currently are fixed, but have historically been priced based on U. S. Treasury bill interest rates. Whether based on a fixed or variable rate, the interest rate does not reflect the borrower’s risk – if the borrower is eligible for a loan, he or she will be charged the same rate as any other eligible borrower.

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