Students sometimes have questions about the differences between federal and government student loans, when in reality they shouldn’t as they are both roughly the same thing. I say “roughly” because using the term government student loans can sometimes refer to both federal, and state student loans, and not simply the education loans that are provided by the Department of Education.
For all intents and purposes government student loans are essentially federal student loans, and visa versa. Students at times forget about the financial aid that they may be able to receive from either the state where their hometown is, or where they are going to school. These types of state-based government education loans are typically smaller than the conventional federal student loans that most students know about—Stafford, Perkins, etc., but they can still provide a substantial amount of capital if they are utilized correctly.
Various Types of Government Student Loans
There are essentially four major types of federal student loans, along with the possibility for receiving state-based aid, perhaps in the form of a student loan. The following is a brief rundown of these government student loans.
- Subsidized Stafford Loan
- Unsubsidized Stafford Loan
- Federal Perkins Loan
- PLUS Loans
- State-based Student Loans
While federal student loans were available from private lenders prior to the passing of the Student Aid and Fiscal Responsibility Act in 2010 via the FFEL Program, this is no longer the case due to the discontinuation of FFELP, and they are now all part of the Direct Loan Program, except for the Perkins Loan.
This means that the money you receive from a federal student loan, regardless of whether or not you’re an undergraduate, or graduate student, will come directly from the Department of Education, without the involvement of any third-party lender.
Both of the Stafford Loans, the Perkins Loan, and most State-based Loans are based on need. PLUS Loans are mostly based on credit, and are contingent on either your parents’ willingness to take out loans for your higher education, or your willingness to do so on your behalf when you’re a graduate student. Each type of government student loan has strict limits on annual loan amounts, and each carries a fixed interest rate that is typically lower than the rates you would receive via a private student loan.
Applying for Federal Student Loans
Completing a FAFSA will put you in contention for both Stafford Loans, the Perkins Loan, and some state-based aid. You still need to complete a FAFSA if either you, or your parents are interested in a PLUS Loan, despite the fact that you, or your parents will have to complete an additional application as well. Some state-based aid may require a separate application as well, and I recommend that you contact either your school’s financial aid department, or your state’s education department to find out about aid that may be available to you.
If you were looking for student loans without a cosigner, these loans should be a perfect fit, as they are based on need, and therefore don’t require any credit checks, or cosigners, PLUS Loans excluded. Please try and complete and submit your FAFSA as soon as possible, as it is always a general rule-of-thumb for almost any kind of federal aid that the earlier you submit your application, the better your chances are at meeting your final end goals.
The earliest that you can go ahead and submit your FAFSA is January 1 for the upcoming school year, and the absolute latest you can submit one is June 30.
Most colleges prefer to send out their award packages before the Spring semester comes to a close, and I therefore urge you to submit your FAFSA before April. Once you have submitted your FAFSA, you should expect to receive an award letter a few months later that should detail the variety of government aid that you may be eligible to get for the upcoming school year. This should include the aforementioned government student loans, and upon receiving your award letter you should try and make sure to send back your acceptance letter as soon as possible in order to secure your aid.
