If you need help paying for college, government student loans should be
the first place you look. While the thought of applying to the
government may conjure up images of laborious paperwork and long
waiting lines, getting government student loans actually can be quick, easy and
stress free.
How to Apply for Government Student Loans The wonderful thing about government student loans is that you only have to complete one application to apply for all of the loan programs offered by the federal government. The application is the Free Application for Federal Student Aid, or FAFSA, and it can be completed and submitted online by visiting www.fafsa.ed.gov. The application is straightforward, and there are complete instructions and a helpline to call if you need more assistance.
The information in your FAFSA will be processed by the US Department of Education to calculate your Expected Family Contribution, or EFC. Your EFC is the amount of college expenses you and your family are expected to pay ("FAFSA Follow-Up Overview"). Your EFC will be sent to the colleges and universities that you designated in your FAFSA, and those schools will use your EFC to decide which government student loans and aid programs you are eligible for, as well as the amount of aid you should receive. Once the schools have figured out the government student loans and other aid to offer you, they will send you an Award Package that details all the government student loans, grants and scholarships you are eligible for ("FAFSA Follow-Up Overview"). Keep your fingers crossed that you get a lot of aid.
Different Types of Government Student Loans When you receive your Award Package, it may contain several different types of government student loans. Because the acronyms and long names can be confusing, here's a little help deciphering the jargon. This is a list of government student loans that might appear in Award Letters from your schools.
- Federal Perkins Loan Program: Perkins loans are given out on the basis of need to both undergrad and grad students. Basically, Perkins government student loans are the best loans you can have because they have the lowest interest rates and the most favorable terms ("Campus-Based Aid").
- Stafford Direct Student Loans: Stafford government student loans are the most common type of loans awarded by the government, and they come in two varieties, direct and FFEL ("Stafford Loans"). Stafford Direct loans come straight from the government; the US Department of Education is your lender. You can have either subsidized or unsubsidized Stafford Direct government student loans. The subsidized loans don't require any interest payments, and they are given out on the basis of need ("Stafford Loans"). On the other hand, unsubsidized loans are available to anyone regardless of need, but you have to make interest payments.
- Stafford FFEL Loans: The main difference between Stafford Direct and Stafford FFEL loans is that the lenders for FFEL loans are private lending institutions such as banks, credit unions and savings and loan associations ("Stafford Loans"). That means a private lender will be handling your loans rather than the government. However, the private lenders that give out FFEL loans have agreed to participate in the government-regulated program. So, you'll get similar terms for both types of Stafford loans ("Stafford Loans").
Hopefully you receive enough aid from the government student loans in your Award Package. But if you don't, there are still other government loans you can apply for. However, they are for the parents of students, and parents must apply. If you find yourself needing more aid, you can go to your financial aid office and ask for an application for a PLUS loan ("PLUS Loans"). If you're curious, the "PLUS" stands for Parent Loans for Undergraduate Students. As with Stafford loans, there are Direct and FFEL versions of PLUS loans. The Direct PLUS loans are straight from the government, and the FFEL PLUS loans are from private lending institutions, similar to the Stafford lonas. For both types of PLUS loans, your parents will have to fill out and submit an application to either your school's financial aid office or to the lender, depending on your school's requirements ("PLUS Loans"). After the application is processed, you should receive a reply stating how much money your parents are eligible for.
Just because you are dealing with the federal government for your loans, doesn't mean the process has to be difficult. With the right information, getting government student loans can be simple. If you need more information about government student loans and other types of student aid, read our Student Loan Guide. The six-part guide will help answer even more of your questions about government student loans and other student aid.
