Student Loans

What Government Student Loans Programs Still Available?

Getting accepted into the college of your choice is a huge achievement and you might excitably share the news with friends and family. But if your bank account isn’t anything to brag about, lack of funds can quickly overshadow your excitement. Going to your parents for financial help might be out the question as they struggle to make ends meet. There is the option of working and paying your own way through school. But one or two classes a semester will double the length of your college career.

Nowadays, there are plenty of financial options for college. Although a scholarship or grant can cover college expenses, submitting an application doesn’t guarantee an award. Applying for government student loans is your best bet, and with the variety of options, there is a program that’s right for you.

1. Federal Direct Stafford Loan

Of all the government student loans, the Stafford Loan is the most common. This type of federal loan is available to graduates and undergraduates, and anyone can apply. These loans are either subsidized or unsubsidized. Subsidized loans are designed for students who have a greater financial need. The interest on these loans is paid by the federal government, thus reducing how much students owe upon graduation. With unsubsidized Stafford Loans, students are responsible for their own interest payments, which can be paid while they’re in school. Both types of loans feature a low, fixed rate, and repayment doesn’t begin until six months after graduation.

2. Federal Perkins Loan

This government program is need-based and provides loans to low-income students. These loans are available to graduates and undergraduates, and loan interest is paid by the federal government. A Perkins Loan features a nine-month grace period and a 10-year repayment term. With this type of aid, colleges and universities receive limited funds from the government each year, and each school determines how much eligible students receive. Undergraduates can receive up to $5,500 per year and graduates can receive up to $8,000 per year.

3. Federal Direct PLUS Loans

For parents who can’t afford to write a check for tuition, there’s the option of a PLUS Loan. This loan is available to parents with dependent students. Funds from this loan can be used for tuition, books, rooming and other college-related expenses. This low-cost loan is non-need based, thus eligibility isn’t based on income. Unlike a Stafford Loan, which doesn’t require a credit check or co-signer, PLUS Loans do require a credit check. To qualify, parents must have a good credit history. Being 90 days late on a debt, or experiencing a foreclosure, repossession, bankruptcy or other major credit problems within the past five years can disqualify parents.

With PLUS Loans, there is no deferment period and repayment begins after funds are disbursed to a school. Although parents apply and take full responsibility for the loan, dependent children must sign a promissory note, in which they agree to repay the loan if their parents default.

For additional information on government student loans, or to complete an application for federal aid, visit