Federal student loans are available for students enrolled at undergraduate and graduate univertsities that is certified for the federal aid programs. Most on-campus insitutions participate in the program. Typically a "college" is defined as 2 or 4 year college. It can either be public or private university or trade school. These federal financing options are actually offered by private financial institutions (banks and other companies) under the supervision and sometime management of the U.S. Department of Education. The US Department of Education has two main programs: Family Education Loan Program (FFELP) where the financial aid is offered to the family/parents and Federal Direct Student Loan Program (FDLP) where the student recieve the payments directly.

Federal loans only cover school expenses: including tuition, room and board, and books. As a result there might be living expense not covered by Federal loans. Often students learn to cover the additiona expenses through additional private loans or a part time job.

Stafford Loans

Stafford Loans are federal education loans made directly to students and are used to pay for tuition when personal and family financial situation can not afford the cost. Depending on income of the family, these loans may be paid in part by the U.S. Government.

These loans are guaranteed by the governement. What this means is that if you default on your loan, the bank actually get their money back from the government. As a result, the interest payment for these loans are extremely low. Everyone attending collge is eligible to receive a stafford loan regardless of credit score. Furthermore, students do not have to pay until 6 month until graduation . . . enought time usually to find a job. Loan amount is unfortunately not very significant: $3,500 per year for freshman, $4,500 for sophomore, and $5,500 per year for juniors and seniors.

Parent PLUS Loan

This loan is available to parents with students enrolled in college (including part-time). PLUS loans has a higher loan limit but has a higher interest rate. Payment and repayment of the loan is responsibility of the parent - it does not effect student’s credit record. PLUS Loans are also available for graduate and professional students.

Graduate PLUS Loan

Parent PLUS Loan and Grad Plus Loan is not subsidized by the federal government. However, the US department of education does guaranteed the loan, up to the entire tuition fee (does not include room and board. This loan is under the student record and credit rating. As long as the student is in school he or she can postpone interest and loan repayment while in school.

Perkins Loan

Perksin Loan is another very popular student loan option. It is a low-interest loan for both undergraduate and graduate students. The unique part of the loan is that the college itself acts as the lender and not a bank or another financial institution - in some what its similar to a grant. The university draws money money provided by the government. Perkins Loans given based on financial need of the family and student.