Federal Education LoansFederal education loans allows students and their parents to borrow money to help pay for college through loan programs that are supported by the federal government. They usually have low interest rates and offer attractive repayment terms, benefits and options. Generally, repayment of a federal loan does not begin until after the student leaves school. Federal education loans can be used to pay school expenses such as tuition and fees, room and board, books, supplies and transportation. These federal student loans are delivered to students through two programs: the Direct Loan Program and the Federal Family Education Loan Program. Both programs offer essentially the same type of loans with similar loan terms and borrower benefits. Your school chooses the loan program in which it will participate. In both programs, loan funds are provided to you through your school. Federal education loans offer borrowers many benefits not typically found in private loans. These include low fixed interest rates, income-based repayment plans, loan forgiveness and deferment options, including deferment of loan payments when a student returns to school. For these reasons, students and parents should always exhaust federal education loan options before considering a private loan.
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