Types of Federal College Loans

Federal college loans tend to confuse many potentialattending school, even though no payment is
college students. Most people do not reallynecessary.
understand the different types of loans available toApplying for federal college loans is rather simple.
them, or how they work. They simply take the wordSubsidized loans typically do not require a credit
of their school that they are being offered the loanscheck, because they are based on need rather than
for which they qualify.creditworthiness. All financial aid will require that you
First, understand that there are actually threesubmit a Free Application for Federal Student Aid, or
different types of federal financial aid. Grants areFAFSA, which you can now file online fairly easily.
money that are given by the government and do notSubsidized Loans
require repayment. The Perkins Loan Program andThe Perkins Loan is borrowed directly from your
the Federal Family Education Loan Program are loansschool. Funds are given to the school by the
that do require repayment. Some federal collegegovernment for this purpose. The loan is given based
loans are subsidized and others are not, but all ofon severe financial need, as well as the availability of
them allow you to wait until after college to startfunds. You can only borrow up to $4,000 per year in
making payments. The most important thing tothis type of loan.
remember is that the federal government doesn'tSubsidized Federal Stafford Loans are borrowed from
actually loan money.a private lender. These loans are higher, and the caps
Subsidized federal college loans are loans that you doare varied based on where you are in your education.
not pay interest on until you graduate college. TheAgain, the interest is paid by the federal government
government pays the interest on these loans instead.as long as you are in school, and in some cases
Unsubsidized loans accrue interest while you'rebeyond.