Federal Student Loans

Federal Student Loans offer the best interest rates and terms for college loans. Most college students will need some type of student loan, so you will want to look at these guaranteed federal government loans as part of your financial aid package.

Student loan interest rates vary each year based upon the 10 year treasury note, but there are caps on the rate.

Last updated on December 3 2016 by College Financial Aid Advice

Federal Stafford Student Loans

Federal Student Loans
The US Direct Federal Student Loan program offers federal loans that can be used at most accredited colleges, including online and for-profit schools. The interest rates are lower than most other student loans, you get a grace period before repayment is required, and there are options to defer, or consolidate loans after graduation.

These loans are knows as Stafford Loans, a great program for federal student financial aid.



Federal Stafford Student Loans

Federal Stafford Student Loans are federal student loans for university and college students. These loans are intended to supplement college savings, family contribution, scholarships, grants and work-study. Nearly all students are eligible to receive Stafford loans, and they do not depend upon your credit rating.

Federal student loans help you establish credit history, so even if you don't need to take out a student loan, you may want to as a way to establish credit.

Stafford Loans may be subsidized by the U.S. government for low-income students with demonstrated need based upon their FAFSA federal student loan application, or unsubsidized Stafford loan.

Starting with 2013-14 school year, the rate for the student loans will vary each year based upon the 10 year treasury note interest rate in the June auction. They will be capped. In addition, a loan origination fee may apply.

Here are the student loan interest rates for 2016 - 2017 school year:

Undergraduate Stafford Loan - 3.76% interest rate (subsidized and unsubsidized)

Graduate Stafford Loan - 5.31% interest rate

Parent Plus Loan - 6.31% interest rate

Here are the student loan interest rates for 2015 - 2016 school year:

Undergraduate Stafford Loan - 4.29% interest rate (subsidized and unsubsidized)

Graduate Stafford Loan - 5.84% interest rate

Parent Plus Loan - 6.84% interest rate

Here are the student loan interest rates for 2014 - 2015 school year:

Undergraduate Stafford Loan - 4.66% interest

Graduate Stafford Loan - 5.41% interest

Parent Plus Loan - 7.21% interest


Subsidized Stafford - Federal Government Student Loans

With subsidized Stafford federal government student loans, the U.S. government pays the interest while you are in school. The 2016-2017 school year set the undergraduate Stafford loan rate at 3.76% for undergraduate students, and is 5.31% for graduate students (unsubsidized only). These are awarded based upon financial need. About 2/3 of Stafford loans go to students with family Adjusted Gross Income (AGI) under $50,000. A high income does not necessarily exclude you, as ~10% go to students with family AGI over $100,000.

Loan Amounts depend on year of school, and if you are a Dependent Students (dependent upon parents for support) or Independent Student (self-supporting).

Dependent Student Subsidized Loan Maximum

1st year - $3,500 (additional $2,000 loan may be unsubsidized)

2nd year - $4,500 (additional $2,000 loan may be unsubsidized)

3rd and 4th year - $5,500 (additional $2,000 loan may be unsubsidized)

Preparatory work (to prepare to enroll in undergraduate program) - $2,625

Preparatory work (to prepare to enroll in graduate or professional program) - $5,500

Teacher certification coursework - $5,500.

Independent Student Subsidized Loan Maximum

1st year - $3,500 (additional $6,000 loan may be unsubsidized)

2nd year - $4,500 (additional $6,000 loan may be unsubsidized)

3rd and 4th year - $5,500 (additional $7,000 loan may be unsubsidized)

Graduate and professional students - up to $20,500 per year and $138,500 total ($224,000 for certain medical school students) in unsubsidized Stafford loans.


Unsubsidized Stafford Federal Student Loan

Unsubsidized federal Stafford student loans are federally guaranteed loans are not based on financial need. Interest accrues when the loan funds are disbursed to the school. The unsubsidized Stafford student loan rate for 2016 - 2017 is now 3.76% for undergraduate students and 5.31% for graduate students.

Payments on an unsubsidized Stafford loan are due to start six months after graduation, or six months after you drop below half-time status.

Paying off Student Loans


How Big of a Loan?

How much loan should you take out? Here is some advice from some of our readers:

Only Take What You Need

Holly, Glencoe, MN USA

When I began my college career I was unsure of the unknown expenses there might be. When I received my Financial Aid Award letter I took the extra money that wasn't need to pay for school and opened a savings account. I kept the extra money as a cushion in case I needed it for an expense I had not foreseen. I promised myself I would never use the money in this account for anything except school expenses. I know of many students who use this money to go on vacation for spring break, to go shopping, etc. Once I completed my first year I took the money in my savings and paid it back so that my borrowed amount was reduced. I followed the same rule throughout my college career and it has reduced my student loans by several thousand dollars.

For additional advice from other students, see Paying off Student Loans

HomeCollege Loans for StudentsFederal Student Loans

Welcome!

Welcome to College Financial Aid Advice, a website full of information on scholarships and grants, student loans, and other ways to save money at college.


Important Things to Do

Class of 2017 Scholarships - High school seniors should start their scholarship and college search now. See our list of Scholarships for High School Seniors

FAFSA - The official 2017 - 2018 FAFSA is available now. See information about FAFSA.


Student Loans

Find out about the best student loan rates before you take out a student loan.

Student Loan Overview

Federal Student Loans

Federal Plus Loan

Student Loan Calculator

Consolidating Student Loans

Perkins Student Loans

Sallie Mae Student Loans

Student Loan Debt Forgiveness

Paying off Student Loans


College Financial Aid Tips

Scholarship Lists An overview of the different types of Scholarship Money for College.

Grants Learn more about grants, the other free money for college.

Need Tuition Help? Reduce the cost of tuition with these college Tuition Assistance Programs.

Tax Credit Claim the American Opportunity Tax Credit.

College Savings Plans Save money for college with these College Savings Plans.

Need a Student Loan? Yes, you qualify for these college Student Loans.


Popular Scholarship Searches

Scholarships for High School Students

Scholarships for College Students

Easy Scholarships

Scholarship Contests

Weird Unknown Scholarships

Merit Based Scholarships

Scholarships for Minorities

College Scholarships for Women