Students planning to attend college should determine how they will pay for their education.  There are many federal government student loan and grant programs available to students that offer very competitive interest rates and favorable repayment options.  In order to qualify for these student aid programs, parents and students must complete the FAFSA, or Free Application for Federal Student Aid.  This application is administered by the Department of Education and does not cost anything.  Each state has their own respective deadline, so please make sure you are aware of the application deadline.

The Federal Direct Loan program, which includes the Stafford Loan and PLUS Loan, is a great source for student loans.  These student loans are distributed to current college students from the federal government and are the most popular type of student loans available since they offer very competitive interest rates and favorable repayment options. 

The Stafford Loan is made up of the Subisidzed and Unsubsidized Loan.  A Subsidized Stafford Loan is awarded on the basis of financial need. If you're eligible for a subsidized loan, the government will pay (subsidize) the interest on your loan while you're in school, for the first six months after you leave school, and if you qualify to have your payments deferred. Depending on your financial need, you may borrow subsidized money for an amount up to the annual loan borrowing limit for your level of study.

You might also be able to borrow loan funds beyond your subsidized loan amount even if you haven’t demonstrated financial need through an Unsubsidized Stafford Loan. Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it's paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (added to the principal amount of your loan).

Parents can borrow a PLUS Loan to help pay for their child’s education expenses if the child is a dependent undergraduate student enrolled at least half time in an eligible program at an eligible college.  In order to qualify, parents must have an acceptable credit history with no previous deliquent student loans.