Federal Loans
Stafford Loans (Federal Family Education Loans (FFELs) and Direct Loans)
The most common type of federal loans are Stafford loans, which can be "subsidized" or "unsubsidized." Subsidized Stafford loans are need-based and the loan's interest is paid by the government while the student is enrolled in school (and in certain other periods). Unsubsidized Stafford loans are available regardless of financial need, but students are responsible for all interest (although interest can be deferred until after graduation). Stafford loans feature capped interest rates of 6.8% or less.
Learn more about Stafford loans from the Department of Education
PLUS Loans (Parent Loans)
Parents and graduate students can borrow up to the cost of attendance for college or graduate school using the Federal PLUS loan program. PLUS loans, which are offered through the Federal Family Education Loan (FFEL) and Direct Loan programs, feature fixed interest rates that are competitive with many private loan programs. Interest on the loan accrues while the student is in school, but repayment can be deferred until 6 months after the student leaves school.
PLUS loans are subject to a credit check, but if a parent is denied, the student for whom the loan is being sought can receive increased unsubsidized Stafford loans. Students and families should contact their college's financial aid office for more information about this program.
Learn more about PLUS Loans from the Department of Education
Perkins Loans
Students with "exceptional" financial need may qualify for Perkins loans. Perkins loans are similar to subsidized Stafford loans because the interest is paid by the government while the student is in school and for 9 months after graduation. Unlike Stafford loans, Perkins loans feature a capped interest rate of 5% and are much more flexible in terms of amount borrowed and repayment schedule.
Learn more about Perkins loans
"Professional Judgment" Adjustments for Federal Loans
Under Federal law, college financial aid officers may use their discretion to increase Federal aid eligibility to students and parents who face special circumstances on a case-by-case basis.
Special circumstances include:
- recent unemployment of a family member
- unusually high health care costs
- medical and dental expenses not covered by insurance
- tuition payments for elementary and secondary school
Students and families should contact their college's financial aid office to learn more about this option. Proper documentation of special circumstances is required for adjustments to be made.
Created 2/12/09: Information provided by ITD's Mass.Gov Office.