Student loans FAQ

Answers to frequently-asked questions about student loans

Instructions: Click each phrase or question to learn more about student loans — where to find them, how to apply, and how to repay.

What student loans are available from the Federal Government?

Federal Perkins Loans are low-interest loans offered through schools.
Federal Stafford Loans are offered through banks, credit unions, non-profit student loan providers, or directly from the federal government through schools.
Federal PLUS Loans for parents allow a parent to borrow up to the entire cost of their child’s education, minus any other aid, either from a private bank, a non-profit lender, or the federal government. These loans are also available to graduate or professional degree students enrolled at least half-time at an eligible school in a program leading to a degree or certificate.

What are Federal Stafford Loans?

Subsidized Stafford loans are awarded based on the student’s financial need. A key benefit of a subsidized loan is that the government pays the interest as long as you’re in school at least half-time.
Unsubsidized Stafford loans are not awarded based on financial need; unlike Subsidized Stafford Loans, you are responsible for paying all of the loan interest. To reduce the long-term, overall cost of the loan, it’s a good idea to begin paying this interest while you’re still in school.

What’s the interest rate on federal loans?

The interest rates for federal student loans are set by the U.S. government. To help make higher education possible for more people, the rates offered are “below-market,” meaning that they’re usually a bargain compared to interest rates offered on non-federal loans.

How do I apply for a federal loan?

Visit the Federal Student Aid website ( for information on federal student aid and a link to the Free Application for Federal Student Aid (FAFSA). You can complete your FAFSA online and electronically sign it. This is a quick, easy alternative to paper documents and allows you to know your eligibility for student aid faster. Keep in mind that the federal government makes changes to its student loan programs from time to time, so check the Federal Student Aid website for the latest information.

What state loans and private loans are available?

Many state governments offer student loans. Check with your state to see what they offer.
If you’ve already applied for federal and state student loans and you still need to borrow more, you may want to consider a private student loan, also known as an alternative student loan. These loans are made by financial institutions and are based on the applicants’ credit.

When do I need to repay?

When you sign a loan agreement, or promissory note, you make a commitment to repay the loan on a schedule. Some lenders may offer more than one option for the repayment schedule or a grace period before your first loan payment is due. With a Federal Perkins Loan, you must begin repaying nine months after you graduate, leave school, or drop below half-time status. With Stafford loans, you must begin repaying six months after you graduate, leave school, or drop below half-time status.

Can repayment be postponed?

If you have a temporary financial hardship, some lenders may give you the option of postponing repayment of the loan for a period of time (known as a deferment) or temporarily reducing the amount of the student loan payment (known as a forbearance).Discuss these options with your lender.
Under the Servicemembers Civil Relief Act (SCRA), if you are deployed you may be eligible for deferred or reduced payments. To make sure you understand your rights under SCRA, contact the Judge Advocate General (JAG) office on your base or post.

Note: To be able to comfortably repay your student loans, try to keep your monthly payment at 10% or less of the net monthly income you plan to earn after you finish school.

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