Federal Student Loan

The United States government hands out millions of dollars in Federal Student loan funding each year to help students achieve their dreams. There are various government sponsored, federal student loan options to choose from to fit your educational needs.

The Perkins Federal Student Loan is a low-interest rate loan for both graduate and undergraduate students based on financial need. Your school or university acts as your lender. The loan is made with government funds, and your school contributes a share.

Depending on when you apply, your level of need and your college’s funding level, you can borrow up $4,000 for each year of undergraduate study with a Perkins federal student loan. Graduate students can borrow up to $6,000 per year. The maximum amount you can borrow from a Perkins federal student loan is $40,000.

Perkins federal student loans do not have to be paid back until nine months after you graduate, leave school, or drop below half time enrollment status. A Perkins Federal student loan allows 10 to 30 year repayment plans, there are no enrollment fees and the interest rate is fixed at 5%.

Stafford federal student loans are the most widely known source of federal aid for students. There are 4 different types of Stafford federal student loans, subsidized and unsubsidized, PLUS federal student loans for parents and the Grad PLUS federal student loan.

A subsidized student loan is awarded solely on financial need. Federally subsidized student loan borrowers won’t be charged any interest fees on their loan while attending school. Unsubsidized federal student loan borrowers are required to pay interest from the time the loan is disbursed until it is paid in full.

The current interest rate for a Stafford student loan is 6.8% but are variable, interest rates are evaluated and may change each year on July 1st, but will never exceed 8.25%. Loan limits on a Stafford Federal student loan depends upon if you’re dependant or independent, subsidized or unsubsidized, but the general loan limits for Stafford federal student loans are: $2625 for the first year, $3500 second year and $5500 for the third year combined.

Federal student loans for parents are available through a PLUS student loan program. They are low interest loans to cover educational expenses of putting their child though college. Parents apply for a Direct PLUS loan or a FFEL PLUS loan by filling out an application which is available at your schools financial aid office or your local federal student loan lender.

Interest rates for the Parent PLUS federal student loan is fixed at 8.5%, are adjusted annually and capped at 9%. There are no loan limits, you are allowed to borrow up to the full cost of education minus other financial aid received.

A Stafford graduate PLUS federal student loan is a federally sponsored loan for students attending graduate school. Business, law and medical school students have an even greater need for these types of loans, and have a multitude of federal student loan options open to them.

Graduate PLUS federal student loan borrowers are allowed from 10 to 30 years to payoff their loan. The current interest rate is fixed at 8.5% and adjusted annually on July 1st, but will never exceed 9%. There are no loan limits on graduate PLUS student loans, and there are interest rate reduction offers available through the Sallie Mae federal student loan Program.

If you are interested in applying for a federal student loan, you’re first step is to fill out and submit the Free Application For Federal Student Aid (FAFSA) Form. This is the official federal student loan form that all federal student aid relies upon. You will need to file this form no matter what type of federal student aid you are requesting. You can get download the form with instructions here www.fafsa.ed.gov.

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