Updated: Oct 20, 2023
What is work-study?
A Federal Work-Study program is a great way to help pay for college and boost your résumé. Discover Student Loans explains work-study, its benefits & more.
Discover will no longer accept new student loan applications after January 31, 2024. Applications received on or before January 31, 2024 will be processed as usual.
The 2024-25 FAFSA® (Free Application for Federal Student Aid) will be available in December 2023.
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The federal government offers several types of student loans to help students and parents pay for college. If you’re eligible, federal student loans will be awarded to you as part of your financial aid package once you complete the FAFSA (Free Application for Federal Student Aid). Here’s a closer look at federal student loans.
The different types of federal student loans are:
Direct Loans are the most well-known with two different types:
Both types of Direct Loans have fixed interest rates and origination fees. There are also limits to how much you can borrow, both annually and in total.
Direct Loans are sometimes referred to as Stafford Loans but they are not the same. Stafford Loans were made to students attending schools that previously participated in the Federal Family Education Loan (FFEL) Program. These loans were funded by private lenders, guaranteed by guaranty agencies, and ultimately insured by the federal government. No new FFEL loans have been originated since July 1, 2010. Since then, all new federal student loans are made directly from the US Department of Education under the William D. Ford Federal Direct Loan Program. So while people use "Stafford Loans" and "Direct Loans" interchangeably, they are actually different types of federal loans.
Direct PLUS Loans are available to parents of dependent undergraduate students and to graduate or professional students to help cover up to the full cost of education, less any other financial aid. A credit check is required for this loan type. But even if you have adverse credit history, you still may be able to receive a PLUS loan if you meet additional requirements. You must fill out an application for a PLUS loan in addition to completing the FAFSA.
Direct PLUS Loans have fixed interest rates and origination fees. The maximum amount you can borrow is the cost of attendance minus any other aid.
Once you are in the grace period or in repayment for your federal student loans, you have the option to consolidate. Consolidation allows you to combine multiple federal student loans into one loan so that you have a single monthly payment. Consolidation may affect your current interest rate, repayment period, total cost of the loan, and other loan factors. Visit the federal government’s Direct Consolidation Loan Application for more information.
Annual loan limits for Direct Loans depend on the loan type, your year in school, and whether you are a dependent or independent student. Generally, as you continue your education, you are able to borrow more. For Direct PLUS Loans, the maximum amount you can borrow each year is the cost of attendance minus any other aid.
Federal student loans have certain features to consider. They include:
All federal student loans have specific terms unique to them. Reading the fine print, asking questions, and making an informed decision can help you choose the right loan for you.
Here’s a look at the application process for federal student loans:
FAFSA® is a registered trademark of the US Department of Education and is not affiliated with Discover® Student Loans.