Financing for the future: federal student loans

Federal Student Loans - Federal Student Loans are available to help students take their education to the heights.

The U.S. Department of Education’s Federal Student Aid (FSA) programs are the largest source of Federal Student Loans in America, providing nearly seventy percent of all student financial aid.

FSA is financial help for students enrolled in eligible programs at participating schools to cover school - a four-year or two-year public or private educational institution, a career school or trade school. The Federal Student Loan will also cover expenses, including tuition and fees, room and board, books and supplies, and transportation.

Most federal aid is need based. The three most common types of aid are grants, Federal Student Loans, and work-study.

Grants are a type of financial aid that does not have to be repaid. Generally, grants are for undergraduate students and the grant amount is based on need, cost of attendance, and enrollment status. Federal Pell Grants for the 2002-2003 school year ranged from $400 to $4,000. Federal Supplemental Educational Opportunity Grants will range from $100 to $4,000.

But Federal Student Loans are borrowed money that must be repaid with interest. Both undergraduate and graduate students may borrow money. Parents may also borrow to pay education expenses for dependent undergraduate students. Maximum loan amounts depend on the student’s year in school.

Federal Stafford Loans are made to students and PLUS Loans are made to parents through two loan programs: William D. Ford Federal Direct Loan Program, where eligible students and parents borrow directly from the federal government at participating schools, and Direct Loans including Direct Stafford Loans, Direct PLUS Loans, and Direct Consolidation Loans.

Not all schools participate in all FSA programs for Federal Student Loans, so ask the financial aid administrator at your school about the programs that are available.

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