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What are Federal Loans?

Federal loans are loans distributed by the government that offer low interest rates and payment options and are designed specifically for college students.

There are two different types of loans available: subsidized and unsubsidized loans. In Subsidized loans, the government covers your interest rate until you graduate college. With unsubsidized loans, the student is responsible for paying the interest on the loan.

To be eligible to borrow money with a loan, a student must be: a U.S. citizen or eligible non-citizen, have a high school diploma or GED certification, not be in default on any other student loans, and be enrolled at least half-time in an accredited degree program.

Federal loans are becoming more and more common as tuition for colleges and universities continues to rise.
They are a good option for students who need financial aid in addition to any scholarships they’ve earned. But applying for and accepting a federal loan is a big decision to make. If you are considering taking out a loan, make sure to have a discussion with your high school advisor and with your family. If you can keep your debt as low as possible, you will have a better start once you graduate college.


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