Types of Federal College Loans

October 2, 2009 · Posted in College Loans · Comments Off 

Federal college loans tend to confuse many potential college students. Most people do not really understand the different types of loans available to them, or how they work. They simply take the word of their school that they are being offered the loans for which they qualify.

First, understand that there are actually three different types of federal financial aid. Grants are money that are given by the government and do not require repayment. The Perkins Loan Program and the Federal Family Education Loan Program are loans that do require repayment. Some federal college loans are subsidized and others are not, but all of them allow you to wait until after college to start making payments. The most important thing to remember is that the federal government doesn’t actually loan money.

Subsidized federal college loans are loans that you do not pay interest on until you graduate college. The government pays the interest on these loans instead. Unsubsidized loans accrue interest while you’re attending school, even though no payment is necessary. Read more

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