What Federal College Loan Is Applicable To You?

A College loan or student loan is a loan program designed to offer financially aid to individuals who desire to further their education in college with a professional degree. A student can apply for a college loan through existing federal student loan programs, administered by the Department of Education under the Higher Education Act.

Federal College Loan Programs

College loans offered by the government fall under two programs, namely:

  • Federal Family Education Loan (FFEL) Program - A guaranteed-insured college loan program wherein the government partnered with private financial organizations to assist parents in funding their children's postsecondary education. Under this program are four components of loans called:
    • Subsidized Stafford Loan - This college loan is created for individuals proven to have financial difficulties to finance their education. The student can completely focus on his studies without worrying about paying the loan's interest rate. The government shoulders the payment of the interest rate while he is still studying, until the six-month grace period ends, from the day he finishes school. The government also assumes the interest rate payment for loan deferment within an approved amount of time.
    • Unsubsidized Stafford Loan- Whether a student establishes a financial need or not, he/she can avail this certain type of college loan. Contrary to the subsidized loan, the government does not pay the interest rate. It is the student's full responsibility to pay the entire amount of interest rate aggregated during the whole period of lending.
    • PLUS Loan (Parent / Graduate) - This college loan allows parents to lend a bigger amount of money, enough to fund the total cost of their children's college education. Professionals or college graduates who aspire for graduate programs like a master or doctor's degree can also apply. It has a fixed interest rate of 8.5%. Payment immediately starts; two months after the loan is disbursed.
    • Federal Consolidation Loan - A college loan program formulated to simplify loan repayments. This loan combines several federal education loans into a single loan. Interest rate and monthly payment is much lower than other types of loans and the repayment term can be extended up to 30 years.
  • Direct Loan (DL) Program - This is a college loan program offered directly to students who wish to pursue higher education after high school. Just like FFEL, DL is funded by the government through Stafford and PLUS loans. The only difference is that, with DL, the Department of Education serves as the lender, while with FFEL, loans are provided by private lenders.

Where To Apply For A College Loan

Applying for a college loan is very easy. It can be done online by any applicant through the Federal Student Aid (FSA), a government office established under the supervision of the Department of Education. FSA is assigned to assist students and parents in their requests for federal college loans. It handles all application and determines its approval. If you want to avail any of the above-mentioned college loan programs, visit the Free Application for Federal Student Aid for more information of the application process.

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