Financial Aid 101 (Continued): Federal Student Loans

Federal Student Loans

The federal government offers several types of student loans based largely on financial need. To receive these loans, students must be enrolled in classes at least at a 50% of a full-time course load.

Federal Perkins Loans

·        Awarded to students with the highest demonstrated financial need by schools participating in the program.

·        Award amounts to an undergrad are up $4000/year. The lifetime limit for undergrads receiving Perkins loans is $20,000.

·        Graduate students can receive a maximum of $6000/year, with a combined undergrad and graduate total of $40000.

·        The loan is repaid directly to the school.

FFEL (Federal Family Education Loans) Stafford Loans

·        Available to both undergraduate and graduate students

·        The amount awarded depends on student status (1^st year, 2^nd year, etc.)

·        For students with financial need, the loans may be subsidized by the federal government (gov’t. pays the interest while you are enrolled in classes on at least a ½ time basis.)

·        To receive an unsubsidized Stafford loan, demonstrating financial need is not required.

Direct Stafford Loans

·        Similar to FFEL Stafford Loans, but in this case the lender is the U.S. Department of Education.

Loan Amounts Available to Independent Students through Stafford Loans Program:

·        1^st year independent student up to $7500 ($3500 maximum for subsidized loans.)

·        2^nd year independent student up to $8500 ($4500 maximum for subsidized loans)

·        3^rd year through graduation up to $10,500 ($5500 maximum for subsidized loans)

·        Total debt level at graduation cannot exceed $46000 of which $23,000 can be subsidized.