FAQs
Federal Loans
There are four types of Direct Loans: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. Direct Subsidized Loans are made to eligible undergraduate students based on financial need. Your school determines the amount you can borrow.
What is type 1 and type 2 student loan? ›
Plan 2 refers to a student loan taken out from September 2012 onwards, in England or Wales. Older loans (from England or Wales) and loans taken out in Northern Ireland, are called plan 1 loans.
What is the most common student loan? ›
The most common federal student loans are Direct Subsidized Loans and Direct Unsubsidized Loans.
What is the best type of student loan to get? ›
A subsidized loan is your best option. With these loans, the federal government pays the interest charges for you while you're in college.
What is the difference between a subsidized and unsubsidized loan? ›
Direct Subsidized Loans: You won't be charged interest while you're enrolled in school or during your six-month grace period. Direct Unsubsidized Loans: Interest starts accumulating from the date of your first loan disbursem*nt (when you receive the funds from your school).
What kind of loans does FAFSA give? ›
Types of federal student loans
Direct Subsidized Loans. Direct Unsubsidized Loans. Direct PLUS Loans, of which there are two types: Grad PLUS Loans for graduate and professional students, as well as loans that can be issued to a student's parents, also known as Parent PLUS Loans.
What is a Plan 5 student loan? ›
Repayment plan 5 is a new repayment plan, being introduced for students starting undergraduate and Advanced Learner Loan courses on or after 1 August 2023. You won't be expected to make repayments to your plan 5 student loan until April 2026 at the earliest, even if you leave your course early.
What is a Plan 4 student loan? ›
If you're a Scottish student who started an undergraduate or postgraduate course anywhere in the UK on or after 1 September 1998, you'll be on repayment Plan 4. This means you'll pay 9% of the income you earn over the threshold to the Student Loan Company (SLC). This percentage stays the same if your salary rises.
Can I choose which student loan to pay? ›
If you have a loan with a variable payment, it may make more sense to start with that debt before rates begin increasing. Alternatively, it might be better to refinance to a loan with a fixed rate if possible. Another option is to start with the loan that has the highest interest rate.
Is $30,000 a lot for student loans? ›
If you racked up $30,000 in student loan debt, you're right in line with typical numbers: the average student loan balance per borrower is $33,654. Compared to others who have six-figures worth of debt, that loan balance isn't too bad. However, your student loans can still be a significant burden.
This can leave borrowers with six-figure education debt worried that typical student loan advice may not apply to their situation. And the number of borrowers with high education debt is growing. As of 2023, there are one million federal student loan borrowers who owe $200,000 or more, according to StudentAid.gov.
What is the average student loan monthly payment? ›
Report Highlights. The average monthly student loan payment is an estimated $500 based on previously recorded average payments and median average salaries among college graduates. The average borrower takes 20 years to repay their student loan debt.
Do student loans go away after 7 years? ›
Student loans don't go away after seven years. There is no program for loan forgiveness or cancellation after seven years. But if you recently checked your credit report and wondered, “why did my student loans disappear?” The answer is that you have defaulted student loans.
What credit score is needed for a student loan? ›
For this reason, lenders often require a minimum credit score between 650 and 700 for a private student loan. If you don't have a credit score of at least 650, you'll likely need to add a creditworthy cosigner to your loan.
Is there a better option than student loans? ›
The best alternatives to student loans are ones you don't have to pay back, but it's worth considering other options—such as employer education benefits, working while in school, or payment plans—if you don't qualify for scholarships and grants that cover all your education costs.
What is student loan 4? ›
If you're a Scottish student who started an undergraduate or postgraduate course anywhere in the UK on or after 1 September 1998, you'll be on repayment Plan 4. This means you'll pay 9% of the income you earn over the threshold to the Student Loan Company (SLC). This percentage stays the same if your salary rises.
What is the difference between a stafford direct loan and a stafford ffel loan? ›
Funds for Direct Loans come from the federal government; loans made through the FFEL program are provided by private lenders and are insured by guaranty agencies and reinsured by the federal government.
How do I tell what type of student loan I have? ›
You can identify your loan types by logging on to StudentAid.gov and selecting “My Aid” in the dropdown menu under your name. In the “Loan Breakdown” section, you'll see a list of each loan you received. You'll also see loans you paid off or consolidated into a new loan.
Are Stafford Loans still available? ›
No new loans have been made under the FFEL Program since July 1, 2010. However, many people and schools also informally use the term “Stafford Loans” or “Direct Stafford Loans” to refer to Direct Subsidized Loans and Direct Unsubsidized Loans made under the William D. Ford Federal Direct Loan (Direct Loan) Program.