Home Business Loan Federal Student Loans | How to Apply

Federal Student Loans | How to Apply


Federal Student Loans | How to Apply: A federal student loan usually referred to as a government loan, enables parents, guardians, and students to obtain money from the federal government for educational expenses. If you still require additional funding for education costs after looking into federal loans, a private student loan may be able to assist. Types of federal student loans

There are several types of federal student loans, including:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans, of which there are two types: Grad PLUS Loans for graduate and professional students, as well as loans that can be issued to a student’s parents, also known as Parent PLUS Loans.

These federal student loans are available through the Federal Direct Loan Program. Since federal loans offer different benefits than private student loans, you should always explore them first.

Federal student loan benefits

  • You have flexibility.
    Though any student loan—federal or private—is a legal agreement and must be paid back with interest, federal student loans generally offer more flexible options than private student loans. For example, with federal student loans, the borrower can change their repayment options even after the loan has been disbursed (sent to your school).
  • You can make payments based on your income.
    Some federal student loans allow for income-driven (or income-based) repayment plans for qualifying borrowers, which cap payments based on the borrower’s income and family size.
  • You don’t need a strong credit history to get federal student loans.
    Unlike private student loans, federal student loans don’t require the borrower to have a strong credit history. This can be especially helpful for recent high school graduates who plan on attending college but haven’t had enough time to build up the credit of their own.
  • You don’t need a cosigner.
    With most federal student loans, other than Direct PLUS Loans, the borrower’s credit is not considered, so it’s not necessary to apply with a cosigner.
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How to apply for federal student loans for college

Applying for federal student loans is free. All you need to do is complete the Free Application for Federal Student Aid (FAFSA®). In addition to determining eligibility for federal student loans, the FAFSA also determines whether you may qualify for other federal student aid like grants and work-study. You need to submit the FAFSA every year you’re enrolled in college to receive federal student aid.

The easiest and fastest way to file the FAFSA and check your eligibility for federal student loans is online. Your application will be processed within 3-5 days. You can also mail in a paper application, but processing it will take about 7-10 days.

Submitting the FAFSA is totally free. If you’re asked to pay, that means you’re in the wrong place.

What happens after you submit the FAFSA

After you submit the FAFSA, the government will send you a Student Aid Report (SAR), which gives you basic information about your eligibility for federal student aid.

The colleges you included on your FAFSA will have access to this information, and they’ll use it to determine the amount of federal student loans, grants, and work-study you may qualify for.

The colleges you’re accepted to will send you a financial aid offer detailing the financial aid you are eligible to receive—including federal student loans, grants, and work-study.

The amount of federal aid you receive from each school can vary, just as the cost of attending each school varies.

Federal student loans for graduate students

Graduate students may qualify for aid from these federal student aid programs:

  • The William D. Ford Federal Direct Loan (Direct Loan) Program
  • Teacher Education Assistance for College and Higher Education (TEACH) Grant

Most students who attend college do not have the funds necessary to pay for it themselves. This is especially true of international students. Chances are, these students cannot rely on their families to pay for their educations, either. For this reason, many students take out student loans in order to pay for their education. The process for applying for student loans varies depending on whether you are applying for federal or private loans.

The process for applying for federal student loans is as follows:


The first thing you will have to do is fill out the Free Application for Federal Student Aid, or FAFSA. This is a sheet that helps you to identify what programs and loans you can qualify for that will help you attend college. You can apply for the FAFSA online.

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Remember that it is important to fill out the FAFSA as soon as possible in order to be qualified for your next semester of school. The form requires a lot of information, some of which will need to be taken from tax papers and financial forms, so it’s a good idea to gather that information before you begin. The FAFSA has to be completed each year you are in school, but it will be easier after the first year.

Student Aid Report

After you fill out the FAFSA, the schools to which you apply will receive a Student Aid Report containing your expected family contribution, or EFC. This is the amount of money you or your family should be able to pay for your education. If your application is incomplete, your SAR will not include an EFC, but it will tell you what you need to do in order to resolve any issues.

When you receive your SAR, review it carefully to make sure that it is correct and complete. The school(s) you listed on your FAFSA will use your information to determine your eligibility for federal—and possibly nonfederal—financial aid. Schools may ask you to verify the accuracy of the date you provide on the FAFSA, so you need to be certain that the information is correct.

Financial Aid Applications

The schools will then send you letters that include information regarding financial aid options and grant programs. You will need to secure those applications and begin the process as soon as possible.

Accepting a Loan

After your school notifies you of the loan amounts that it is offering, generally in an “award letter” that lists all of your proposed financial aid awards (your award package), you should evaluate the aid offer carefully. Keep in mind that whatever you borrow must be paid back with interest. If your living expenses are not as high as the standard allowance projected by your school, you may not have to borrow as much as the amount in the award letter.

You have the right to decline the loan or request a lower loan amount. Your school will let you know how to do this in the award letter.

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Entrance Counseling

With the exception of parent Direct PLUS loan borrowers, if you haven’t received a loan before, you must receive entrance counseling before your school can make the first disbursement of your loan. Entrance counseling helps you to understand your responsibilities regarding your loan. Your school may require in-person counseling or you may be able to complete the counseling online.

Loan Disbursement

If you do qualify for federal loans, the money will generally be sent to the school, and the school will disburse the money to you. The money will go towards helping you pay for the cost of the semester, as well as books and supplies and, in some cases, living expenses.

What is the maximum you can borrow in federal student loans?

$57,500 for undergraduates-No more than $23,000 of this amount may be in subsidized loans. $138,500 for graduate or professional students-No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

Are federal loans the same as student loans?

Generally, there are two types of student loans—federal and private. Federal student loans and federal parent loans: These loans are funded by the federal government. Private student loans: These loans are nonfederal loans, made by a lender such as a bank, credit union, state agency, or school.

What is the monthly payment on a federal student loan?

Your monthly payments will be either 10 or 15 percent of discretionary income (depending on when you received your first loans), but never more than you would have paid under the 10-year Standard Repayment Plan. Payments are recalculated each year and are based on your updated income and family size.

What happens if you don’t pay federal student loans?

If you don’t make your student loan payment or you make your payment late, your loan may eventually go into default. If you default on your student loan, that status will be reported to national credit reporting agencies. This reporting may damage your credit rating and future borrowing ability.

Which are better federal or private student loans?

Federal loans generally have more favorable terms, including flexible repayment options. Students with “exceptional financial need” may qualify for subsidized federal loans while unsubsidized loans are available regardless of financial need.


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