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Federal Student Loan Programs
Will you need a loan to attend college?
If you need a loan to help cover the cost of a college or career school education, think federal
student loans first. Both federal and private student loans are borrowed funds that you must repay
with interest, but federal student loans usually offer lower interest rates and have more flexible
repayment terms and options than private student loans.
1. What is a federal student loan? 4. How much should I borrow?
A federal student loan is made through a loan You can determine whether you need a loan and
program administered by the federal government. how much you need to borrow by adding up the
total cost of your education (tuition, fees, room and
2. What is a private student loan? board, etc.) and subtracting the amount of
A private student loan is a nonfederal loan made by scholarships, grants, and savings you have to
a private lender, such as a bank or credit union. contribute to those costs. You should borrow only
The terms and conditions of private student loans what you need, and consider the earning potential
are set by the lender, not the federal government. If in your chosen profession to determine how easily
you're not sure whether you're being offered a you'll be able to repay your debt. You can find
private loan or a federal loan, check with the salary estimates for various occupations in the U.S.
financial aid office at your school. Department of Labor's Occupational Outlook
Handbook at https://www.bls.gov/ooh. Your
3. Why are federal student loans student loan payments should be only a small
usually a better option for paying for percentage of your salary after you graduate.
a college or career school
education? Have questions? Contact or visit the
Federal student loans offer many benefits that don't following:
typically accompany private loans. These include ? StudentAid.gov
fixed interest rates, income-based repayment
plans, loan cancellation for certain types of ? a school's financial aid office
employment, deferment (postponement) options, ? firstname.lastname@example.org
and interest rate reduction based on repayment
method. Also, private loans usually require a credit ? 1-800-4-FED-AID (1-800-433-3243)
check, while most federal loans for students do not.
For these reasons, students and parents should
always exhaust federal student loan options first
before considering a private loan.
Federal Student Aid | StudentAid.gov Page 1 of 2
What kinds of federal student loans are available?
The interest rates shown are fixed for the life of the loan.
Federal Loan Program Details Annual Award
Program (subject to change)
Direct ? For undergraduate students with financial need Up to $5,500 depending
Subsidized ? For loans first disbursed on or after July 1, 2022, and on grade level and
Loans before July 1, 2023, the interest rate is 4.99% dependency status*
? You're not usually charged interest on the loan during
certain periods, such as when you're in school at least For total lifetime limit, go
half-time to StudentAid.gov/sub-
? The U.S. Department of Education (ED) is the lender;
payment is owed to ED
Direct ? For undergraduate, graduate, and professional degree Up to $20,500 (less any
Unsubsidized students; financial need isn't required subsidized amounts
Loans ? For loans first disbursed on or after July 1, 2022, and received for same period)
before July 1, 2023, the interest rate is depending on grade level
and dependency status*
o 4.99% for loans made to undergraduate students,
and For total lifetime limit, go
o 6.54% for loans made to graduate and to StudentAid.gov/sub-
professional degree students unsub
? You're responsible for paying the interest during all periods
? ED is the lender; payment is owed to ED
Direct PLUS ? For parents who are borrowing money to pay for their Maximum amount is the
Loans dependent undergraduate child's education, and for cost of attendance
graduate or professional degree students;* financial need (determined by the school)
isn't required minus any other financial
? For loans first disbursed on or after July 1, 2022, and aid the student receives
before July 1, 2023, the interest rate is 7.54%
? You must not have an adverse credit history (unless you
meet certain additional eligibility requirements) **
? ED is the lender; payment is owed to ED
*Learn about dependency status at StudentAid.gov/dependency.
**Learn about PLUS loans and adverse credit at StudentAid.gov/plus.
Note: Find interest rates on loans disbursed before July 1, 2022, at
For more information on loans, visit StudentAid.gov/loans. Find this fact sheet at
Federal Student Aid | StudentAid.gov Page 2 of 2
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Title: Federal Student Loan Programs
Subject: Federal Student Loan Programs
Keywords: "Federal Student Aid, Fact Sheet, Student Loans
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