Federal Student Loans 101

About Federal Student Loans

Federal student loans make it possible to go to college when you don't have money on the spot to pay for your education. As long as you meet basic eligibility requirements, these loans can help fill the gap when scholarships, grants, and work-study don't cover all of your education-related expenses. Discover your options below.

Who Can Get Federal Student Loans

Students at four-year colleges or universities, community colleges, or career schools can apply for federal financial aid, including grants (don’t have to be paid back), work-study (part-time work to earn money while in school), and federal student loans. Most financial aid is based on financial need, which is determined by submitting the FAFSA®. Students must meet several other basic eligibility requirements to qualify.

Parents can also apply for federal student loans, called Federal PLUS Loans, to help pay for their child's education.

Types of Student Loans

Federal student loans are financial aid funds that must be repaid, plus interest. New federal student loans are funded through the Federal Direct Loan Program (FDLP). An FDLP loan is originally borrowed from or currently owned by the Department of Education. All federal student loans borrowed after June 2010 are FDLP loans, though borrowers could receive FDLP loans before that time.

Some older federal student loans were part of the Federal Family Education Loan Program (FFELP). A FFELP loan was originally borrowed from a company such as a bank, lender, or non-profit organization, and could be currently owned by the Department of Education, a bank, lender, or non-profit organization. The FFEL Program ended in June 2010.

The types of federal student loans currently available are:

How to Apply

To apply for federal financial aid, students should fill out the FAFSA as soon as possible after January 1 each year that they plan to attend school. Parents can apply for a PLUS loan by completing a Direct PLUS Loan application and Master Promissory Note (MPN). The school's financial aid office can provide instructions on applying for a PLUS loan. The office may offer the option of completing the PLUS application and MPN online at StudentLoans.gov.

Student Loan Servicers (Customer Service)

Once you take out a student loan, it is assigned to a loan servicer. The servicer processes your payments and is the resource to answer all of your questions about your student loan account.

Nelnet, for example, provides customer service for federal student loans made by the Department of Education, itself, and other lenders, and we are happy to help in any way we can.

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