Remember, a subsidized student loan, that you could be eligible for through your FAFSA (Free Application for Federal Student Aid) application, means you do not pay on the interest of the loan while you are still in school. The government subsidizes, or takes care of that money, while you’re a student.

What is the difference between a Grad PLUS loan and an unsubsidized loan?

Direct Unsubsidized Loans have lower fees and interest rates than PLUS Loans. In fact, the origination fee, or “loan fee” on a Direct Unsubsidized Loan is one-fourth of the fee you’ll pay for a PLUS Loan. Direct Unsubsidized Loans aren’t credit-based, unlike private student loans.

What are federal student loans and what do they do?

Federal student loans are educational loans backed by the federal government. They’re available at all educational levels to students of varying financial means. Understand how federal loans work and the different types of loans and their benefits to get the funds you need to cover your education. What Are Federal Student Loans?

Are there fees associated with federal student loans?

However, it’s important for borrowers to realize that there’s a little-known cost associated with federal student loans — an origination fee that is deducted from each and every Direct Subsidized Loan, Direct Unsubsidized Loan, and Direct PLUS Loan.

What kind of loans are available to students?

They are either subsidized or unsubsidized loans, where the federal government covers interest on subsidized loans and students cover it on unsubsidized loans. Subsidized Stafford Loans from the federal government are only available to those who are pursuing an undergraduate degree and who have a financial need.

How long do you have to pay federal student loan?

Or, borrowers may choose income-driven repayment, which can make the repayment term on a federal student loan anywhere from 10 to 25 years. While the federal loan origination fee should definitely be taken into consideration when borrowing the money, it’s impossible to do an accurate APR calculation on a federal student loan.