U.S Federal Student Loan

The Federal Student Loan (FSL) is financial aid for anyone interested in furthering their education at college or university. It is also called Federal Direct Loan. The U.S. Department of Education administers the federal student aid program.

Anyone applying for any type of government-subsidized loan must fill out a special application called the Free Application for Federal Student Aid, or FAFSA for short. Go to www.fafsa.ed.gov/; www.direct.ed.gov/; http://studentaid.ed.gov for more detailed information.

There are several different loan programs, depending on the financial situation of the student or applicant. The Stafford Loan, administered directly by the Department of Education, is a low-interest loan for students to attend a four-year university, college, or trade, career, or technical school. A subsidized loan allows for no interest payments during at least half the time you are at college or during grace and/or deferment periods. Unsubsidized loans mandate interest payments.

Usually a Stafford loan is paid in two installments, directly through the school. The money goes first to tuition, fees, room and board, and any other school costs. If there is any loan money left after those costs, the remaining balance is paid by check.

Another Federal Student Loan program is campus-based aid. Not all schools participate in campus-based aid, and the money is distributed directly by the school the applicant is attending. There is the Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and the Perkins Loan.

The amount of money received from campus-based aid is calculated from your financial need, other aid you are receiving, and the availability of funds from your particular school. The FSEOG does not have to be paid back (it is a grant, not a loan), and the amount you can receive may vary from $100 to $4000 per year. You can either be paid directly by check or have the money credited to your account. The FSEOG is only for undergraduates with financial need.

The Federal Student Loan of Work-Study provides part-time jobs for both undergraduates and graduate students. Anyone applying for FWS is encouraged to either do community service or work related to their chosen field of study. Work hours are determined by your financial aid administrator so they do not conflict with classes. Under this program, you may work on your school campus or for a non-profit organization in the public interest.

The Perkins Loan is a low interest loan (5%) for both graduates and undergraduates. Since it is campus-based aid, the money, supplied by the federal government, comes directly from your school’s financial aid office. This loan is repaid to your school. A total of $27,500 for four years can be borrowed by the undergraduate, up to $8,000 per year for the graduate student.

The Direct PLUS federal student loan is for graduate and professional degree students. Before a student can get Direct PLUS, their maximum eligibility for the Stafford Loan (both subsidized and unsubsidized) must first be determined. Additionally, the applicant must not have a bad credit history, and the interest rate is fixed at 7.9%. A Master Promissory Note (MPN) is filled out, which legally obliges the student to repay all accrued interest, fees, and the total loan amount back to the Education Department (federal).

When you go to the federal student loan webpage, you will find all the necessary information, tools and resources to obtain your federal student loan. All the schools that have federal loan programs are listed, as well as deadlines and financial aid tools. Prospective students, as well as counselors and parents, will also find valuable tools and resources to obtain the exact financial package that meets their individual needs, whether it is a loan, grant, or scholarship.

Good luck on furthering your higher education!