Student Loans

Last updated 29th Nov 2022


The term student loan is used to describe borrowed money, which must be repaid with interest. Students can be studying for undergraduate or graduate degrees to be eligible for a loan. Parents of students may also borrow money to help pay for the educational expenses of dependent undergraduate children.


Students demonstrating the greatest financial need are eligible for Federal Perkins Loans. These loans are funded by the federal government, but repaid directly to the school. Students are also eligible for Stafford Loans, while parents of students can apply for PLUS loans.

Student loans are currently made available through two programs:

William D. Ford Federal Direct Loan (Direct Loan) Program: Loans are made directly from the federal government, and are repaid to the U.S. Department of Education. The student loans in this program include:

  • Direct Subsidized Loans: available to students demonstrating financial need.
  • Direct Unsubsidized: available to all students, regardless of demonstrated need.
  • Direct PLUS Loans: available to parents of undergraduate students
  • Direct Consolidation Loans: allows students to consolidate loans under one loan servicer

Federal Perkins Loans: Loans are made directly with, and repaid to, the educational institution the student attends. Federal Perkins Loans are made available to both undergraduate and graduate students demonstrating exceptional financial need.

Student loans are one of the three forms of financial aid available to students. The other two forms of student aid are grants and work study.

Note: As a result of the Health Care and Education Reconciliation Act of 2010, the Family Education Loan (FFEL) Program was phased out beginning on July 1, 2010. Information for this program appears below.

Family Education Loan (FFEL) Program: Loans made through private lenders, with funding guarantees from the federal government. Loans are repaid directly to the private lending institution. The student loans in this program include:

  • Federal Stafford Loans
  • Federal PLUS Loans
  • Federal Consolidation Loans

Related Terms

Direct Loans, PLUS Loans, Federal Work Study, Grants

Moneyzine Editor

Moneyzine Editor