Know your loans
Knowing the terms and obligations of your student loans makes it easier to work with lenders, and can save you money over the life of the loan. We have comprehensive information about student loan types, plus links to additional resources.
Find information about your loans
Not sure what types of loans you have? You have options. Go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information. You can also visit the U.S. Department of Education's Federal Student Aid website for comprehensive details about student loan types.
Federal Direct versus FFEL Program loans
Your college made the choice to participate in either the Direct Loan Program or the Federal Family Education Loan (FFEL) Program, or both. The primary difference between the Direct Loan Program and the FFEL Program is how loans are funded through these programs. The federal government funds Direct Program loans, while the FFEL Program depends on institutions like private banks for capital. As of July 1, 2010, federal student loans will no longer be issued through the FFEL Program.
Federal Stafford Loan Program
Any college student attending an eligible, participating school at least half-time may qualify for Stafford loans. Stafford loans can be subsidized or unsubsidized and beginning July 1, 2010, all will originate from the Direct Loan Program. Most student loans are Stafford loans.
Subsidized versus unsubsidized federal loans
Federal Stafford loans come in two types: subsidized and unsubsidized. The federal government pays the interest on subsidized loans while you’re in school and during your grace period, or if you are in deferment. The federal government does not pay interest on unsubsidized loans, and interest begins to accrue when the loans are disbursed.
Subsidized Stafford Loans
- The federal government makes interest payments while you’re in school and during your grace period.
- If you return to school and defer your loans, the government resumes interest payments.
- The government makes interest payments for other deferments as well. See our Deferment section for more information.
Unsubsidized Stafford Loans
- The federal government does not make interest payments on your loans.
- You must pay any interest that accrues on your loans.
- You pay interest during any deferment period.
If you don’t make interest payments while you’re in school, in your grace period or in deferment, the interest that accrues during those times is typically added to the principal balance (known as capitalized interest). Capitalized interest can significantly increase your loan balance.
To avoid capitalized interest, you can make interest payments when you are in school, during your grace period or while you’re in deferment. To find out how much you can save, use our Value of making interest payments calculator.
Federal PLUS and Grad PLUS Loan Programs
PLUS loans allow parents to borrow money to pay for their dependent children’s undergraduate education. In addition, graduate and professional degree students may obtain Grad PLUS loans to help pay for their own education. Beginning July 1, 2010, new PLUS loans will originate from the Direct Loan Program.
Federal Consolidation Loan Program
You can combine multiple federal loans into a single, consolidated loan with one monthly payment. However, consolidating may not be the best financial choice. Consolidation extends the term of repayment, which can lead to higher costs over the life of the loan. You may also lose some of the individual benefits of your loans. It is worth considering loan consolidation carefully before deciding if it works for you. See our Consolidation section for more information.
Federal Perkins Loan Program
Perkins loans are need-based, fixed-rate loans available to students with exceptional financial need. Perkins loans are typically made by your college using a combination of their own funds and federal dollars. Perkins loans have no origination fees, a longer grace period than Stafford loans, and are repaid to the school.
Private student loans
Private loans are non-federal loans issued by a lender. Private loans have different terms and conditions than federal student loans, terms that may not be as beneficial as federal student loans. You should exhaust all of your federal student loans before you use a private loan. To find out more about your private loans, consult the promissory note you signed or contact your lender for details.
State student loans
You may also have student loans provided by your state. State program student loans are non-federal loans managed by each state. To find out more about your state program student loans, consult the promissory note you signed and contact the state entity that services the loan.
