Types of Student Loans
When you are exploring ways to pay for college, career, or technical schools, you may consider taking out a student loan—money you borrow to help you cover your education expenses and that you must pay back with interest.
Student loans originate from the federal government (called “federal student loans”) or from private sources, such as a bank, credit union, state agency, or school. Learn the differences between federal and private loans before considering a loan.
Federal Student Loans
If you need to borrow money to pay for college or career school, start with the more affordable federal student loan:
Types of Federal Student Loan Programs - The William D. Ford Federal Direct Loan (Direct Loan) Program offers four types of Direct Loans:
- Direct Subsidized Loans are made to eligible undergraduate students based on financial need.
- Direct Unsubsidized Loans are made to eligible undergraduate, graduate, and professional students, and are not based on financial need.
- Direct PLUS Loans are made to graduate or professional students and parents of dependent undergraduate students.
- Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.
The Federal Perkins Loan Program is administered through the schools, and awarded to undergraduates and graduate students with exceptional financial need. If you are eligible, you should take this loan first.
Eligibility - You must be enrolled at a school that participates in the school loan program, and meet the general eligibility requirements.
Private Student Loans
Before taking a private loan, make sure you need it. These loans generally are not as affordable as federal student loans, and offer little repayment flexibility. Read these tips before getting a private loan.
Learn more about student loans, and how to identify deceptive private loan practices.