Federal Student Loans
Who Can Get Federal Student Loans
Anyone attending a four-year college or university, community college, or career school can apply for federal student aid, including:
- Grants, which don’t need to be paid back;
- Work-study, which is part-time work that allows students to earn money while in school; and
- Federal student loans
Most federal aid is decided based on financial need. Students must submit the FAFSA® and meet several other basic eligibility requirements to qualify.
Parents may also apply for federal student loans, called Federal PLUS Loans. These loans can also be applied toward the student’s educational costs.
| for Loans Disbursed Between July 1, 2022 and June 30, 2023 | |||||
| Direct Loan for Dependent Undergraduates | Direct Loan for Independent Undergraduates | Direct Loan for Graduates | Direct Parent PLUS | Direct GradPLUS | |
|---|---|---|---|---|---|
| Subsidized Interest Rate (new loans) |
4.99% | 4.99% | N/A | N/A | N/A |
| Unsubsidized Interest Rate (new loans) |
4.99% | 4.99% | 6.54% | 7.54% | 7.54% |
| Credit Check? | No | No | No | Yes | Yes |
| Loan Limit 1st Year | $5,500 1, $3,500 2 | $9,500 1, $3,500 2 | $20,500 1, $8,500 2 | None | None |
| Loan Limit 2nd Year | $6,500 1, $4,500 2 | $10,500 1, $4,500 2 | $20,500 1, $8,500 2 | None | None |
| Loan Limit 3rd Year and Beyond | $7,500 1, $5,500 2 | $12,500 1, $5,500 2 | $20,500 1, $8,500 2 | None | None |
| Demonstrate Financial Need? |
Yes – subsidized, No – unsubsidized |
Yes – subsidized, No – unsubsidized |
Yes – subsidized, No – unsubsidized |
No | No |
1Limit of combined subsidized and unsubsidized funds. back
2Additional unsubsidized eligibility available for student whose parent is unable to obtain a PLUS loan. back
Learn more about Federal Direct Loans.
Direct Stafford Loans
Direct Stafford Loans are typically the first type of loan borrowed once scholarship, grant, and work-study options have been exhausted.
There are two types of Stafford Loans: subsidized and unsubsidized.
The interest on subsidized loans is paid by the government while you're still in school.
Meanwhile, you are responsible for paying the interest that accrues on unsubsidized loans while you’re in school. If you don't pay on the interest while you're in school, it's added to your principal balance (capitalized) when you graduate or drop below half-time status.
Benefits:
No payments required while enrolled in school at least half-time and generous borrowing limits depending on years in school and degree status.
Eligibility:
Nearly all students are eligible for a Stafford Loan, regardless of credit. Whether the loan is subsidized or unsubsidized depends on financial need, as determined by the FAFSA.
Loan limits:
Stafford loan amounts increase each year you are in school. See the chart above for details.
Direct PLUS Loans for Parents
Parents may choose to offset the cost of higher education by obtaining loans to help pay for those expenses.
Benefits:
PLUS loans can help cover the educational expenses not met by federal student aid. Additionally, parents can defer payment on loans until after the student's graduation. As these loans are not need-based, parents don't need to demonstrate financial need to apply.
Eligibility:
Eligibility depends on a modest credit check. An endorser may be required if the borrower has adverse credit. Some schools require that a FAFSA be completed before a PLUS loan can be awarded, but some do not.
GradPLUS Loans for Graduate and Professional Students
This loan is specifically for students seeking a graduate or professional degree.
Benefits:
This loan is similar to the parent PLUS loan because it can cover the total amount needed for tuition and education-related expenses, minus other aid awarded, and payments may be postponed (deferred) until after graduation.
Eligibility:
A modest credit check is required for this type of loan. An endorser may be required if the borrower has adverse credit.
How to Apply
In order to receive federal financial aid, students must fill out the FAFSA as soon as possible after January 1 of each year they plan to attend school.
Parents can apply for a PLUS loan by completing a Direct PLUS Loan application and Master Promissory Note (MPN), and the school's financial aid office can provide additional instructions. The office may also offer the option of completing the PLUS application and MPN online at StudentAid.gov.
Student Loan Servicers (Customer Service)
Once you’ve taken out a student loan, that loan is assigned to a loan servicer. The servicer processes your payments and helps you navigate paying back your loans, in addition to answering any questions you might have about your student loan account.
Nelnet provides customer service for federal student loans made by the Department of Education and for other lenders, and we are happy to help any way we can.