Federal Student Loan Facts
Federal College Student Loans
Your federal financial aid assistance award letter will inform you about the federal college student loans for which you qualify for. There are five types of college student loans that you may see on your federal financial aid assistance award letter.
• Federal Perkins College Student Loans
• Federal Stafford College Student Loans
Subsidized Federal Stafford College Student Loans
Unsubsidized Federal Stafford College Student Loans
Federal Perkins College Student Loans
Federal Perkins College Student Loans are for students with the greatest financial aid need. These college student loans are made by the college or university using government funds.
A few Federal Perkins College Student Loan facts:
• You must complete the FAFSA to find out if you qualify for a Federal Perkins College Student Loan.
• The college student loan amount is based upon funding available to a college or university.
• There is no origination or guarantee fee.
• The interest rate will be fixed at 5.00%.
• Repayment will begin nine months after you graduate, leave school or drop to less than half time.
Federal Stafford College Student Loans
Your college or university will participate in one or the other program that provides a Federal Stafford College Student Loan. The main difference between the two programs is who funds the college student loan. Your school will inform you of the program it does participate in and how to apply for a Federal Stafford College Student Loan.
Your school may participate in either the:
• Federal Family Education College Student Loan Program (FFELP) where banks, credit unions and financial institutions fund the college student loans.
• William D. Ford Federal Direct College Student Loan Program (Direct Student Loan) where the U.S. Department of Education will provide the money for the college student loan through the college or university.
Subsidized/Unsubsidized
There are two types of Federal Stafford College Student Loans: Subsidized and Unsubsidized.
Subsidized Federal Stafford College Student Loans
Subsidized Federal Stafford College Student Loans are based on financial aid need. While attending school and during the six-month grace period after you have graduated, drop to less than half time or leave school, the government will pay the interest on your Subsidized Federal Stafford College Student Loan.
Unsubsidized Federal Stafford College Student Loans
Unsubsidized Federal Stafford College Student Loans are not based on financial aid need. You will be responsible for paying the interest that accrues while you are continuing to attend college. You will, however, have the option either to pay the interest while you are in school or to add it to the principal amount of your student loan.
Federal Stafford College Student Loan Facts
A few Federal Stafford College Student Loan facts:
• You must complete the FAFSA.
• The interest rate is fixed at 6.80%.*
• Repayment will begin six months after you graduate, leave school or drop to less than half time.
For undergraduate Subsidized Federal Stafford College Student Loans with disbursements made on or after July 1, 2008, and before July 1, 2009, the interest rate will be fixed at 6.00% for the life of the college student loan.
