Student loans are loans taken out to pay for post-secondary education. When looking for a student loan, you can choose to take out a loan with the federal government or with private lenders. The differences between these lenders is demonstrated below. 

What is the FAFSA?

The FAFSA is the official form to fill out to apply for federal financial aid to pay for college. It is used for loans, scholarships, and grants. Even if you are not taking out student loans or do not believe you will be granted anything from FAFSA, filling it out is still a good idea because eligibility for many scholarships depends on the FAFSA. 

When do you Apply for FAFSA? FAFSA for the upcoming school year opens up on October 1 and the priority deadline is February 1. 

Types of Federal Loans

Direct Subsidized Loan: These loans are given to students based on financial need. In these types of loans, interest is not charged on the loan until you graduate as long as you are enrolled at least half-time. 

Direct Unsubsidized Loan: These loans are given to students without regard to financial need. In these types of loans, interest begins accruing as soon as you receive the funds. 

Direct PLUS Loan: These loans are meant for the parents of college of college students and are not based on financial needs. These loans do require the applicant (the parent) to pass a credit check and reapply for funds each academic year. In addition, the parent rather than the student, is financially responsible for paying off the loan. 

Direct Consolidation Loan: These loans are used to consolidate two or more federal education loans into a single loan with a fixed interest rate. You cannot consolidate private loans with the federal program, but private lenders have options to consolidate private loans. 

How to Apply for a Student Loan

1. Fill Out the FAFSA
2. Compare Financial Aid Offers
   1. Financial aid offices in colleges and universities will look at your FAFSA to determine how much to offer you in loans and scholarships. 
3. Consider Private Student Loans
4. Choose Your School