Federal Loans

When it comes to borrowing money for college, in most cases, it’s a smart move to turn to the federal government. Why? Because federal loans offer a range of advantages over private loans, including lower interest rates, borrower protections and more flexible repayment options. To qualify for federal student loans, you’ll need to submit the FAFSA.

Types of Federal Loans

• Federal Direct Subsidized Loans: These loans are based on financial need, and the government pays the interest while you’re in school and during certain deferment periods. They offer some of the best terms for students in need.
• Federal Direct Unsubsidized Loans: Unlike subsidized loans, these loans are not based on financial need. Although you’re responsible for paying the interest, the loans still come with lower interest rates compared to private loans. Plus, you have the option to defer interest payments until after graduation.
• Federal Direct PLUS Loans: These loans are available to graduate students and parents/guardians of dependent undergraduate students. Direct PLUS loans have a higher interest rate but can cover a larger portion of educational expenses. They require a credit check of the applicant (parent/guardian or student) but offer more flexible repayment options than some other options.

Federal loans can be a great option for financing your education. They offer favorable terms, borrower protections, and a range of repayment options to make your financial journey smoother. Don’t forget to explore these opportunities before considering private loans.

Need help understanding federal student loans? Check out these resources:

• Student Loan Terms A-Z
• Federal Student Aid's YouTube channel

For even more information on the college financing process, visit the Virginia Student Loan Help website.

Virginia Student Loan Help