When it comes to paying for college, student loans are typically one of the first options that comes to mind. Although it’s wise to turn to free forms of financial aid – like grants and scholarships – first, student loans are a helpful resource to help fill gaps that other financial aid doesn’t cover. Federal student loans, in particular, are some of the best types of aid out there. Check out our guide below to learn how to apply for federal student loans!
What are federal student loans?
As the name suggests, these are loans for college offered by the federal Department of Education. There are a few types of federal student loans available to help cover college expenses. These include:
- Direct Subsidized Loans: available to undergraduate students who demonstrate financial need
- Direct Unsubsidized Loans: available to undergraduate, graduate, and professional students (regardless of demonstrated financial need)
- Direct PLUS Loans: available to graduate or professional students, and parents of dependent undergraduate students (eligibility is not based on financial need, but a credit check is required)
Federal student loans also offer a few benefits that you may not find in private student loans. For one, federal student loan interest rates are fixed and are typically lower than you may find in a private student loan. They also offer more flexible repayment plans and deferment options if you’re concerned about your ability to make your payments.
The Application Process
Applying for federal student loans is a pretty straightforward process. The first step you’ll need to complete is filing the FAFSA (the Free Application for Federal Student Aid). This is the only way to apply for federal financial aid (federal student loans, scholarships, grants, and more). From there, the government will access your eligibility for different forms of aid. Your school will then send you a report detailing what financial aid you’re eligible for, which may include federal student loans.
After that, it’s up to you! You can choose which aid you’d like to accept, and your school will help you complete the process to receive the funds. You will typically be required to complete entrance counseling (which will help you understand what taking on the loan means for you). You’ll also have to sign a Master Promissory Note, which details your agreement to the terms of your loan.