Will you need a loan to attend college? If so, think federal aid first. Federal student loans usually
offer borrowers lower interest rates and have more flexible repayment terms and options than
private student loans.

1. What is a federal student loan?
   Federal loans are borrowed funds that you must repay with interest. A federal student loan
   allows students and their parents to borrow money to help pay for college through loan programs
   supported by the federal government.They have low interest rates and offer flexible repayment
   terms, benefits, and options. Click here for sample repayment schedules for the Direct Loan programs.

   Income-Based Repayment Calculator:

   http://studentaid.ed.gov/repay-loans/understand/plans/income-based/calculator

2. What is a private student loan?
   A private student loan is a nonfederal loan issued by a lender such as a bank or credit union. If
   you’re not sure whether you’re being offered a private loan or a federal loan, look at the name
   of the loan to see if it includes the word “federal” and also check with the financial aid office at
   your school. Click here for more information about private loans.
3. Why are federal student loans a better option for paying for college?
   Federal student loans offer borrowers many benefits not typically found in private loans. These
   include low fixed interest rates, income-based repayment plans, cancellations for certain
   employment, and deferment (postponement) options, including deferment of loan payments
   when a student returns to school. Also, private loans usually require a credit check. For these
   reasons, students and parents should always exhaust federal student loan options before
   considering a private loan.
4. How do I access the federal student/parent loans?

   The University of San Diego Office of Financial Aid will determine your eligibility for the federal student loan programs based on the information submitted on your Free Application for Federal Student Aid (FAFSA). Students whose parents wish to borrow under the Federal Parent PLUS loan program must now also complete the FAFSA.  Students must submit the FAFSA each year.

5. What kinds of federal student loans are available?
   

   Federal Loan Program	Program Details	Annual Award Limits
   Federal Perkins Loan	For undergraduate and graduate students • Funds depend on student’s financial need and the availability of funds at the college • Interest is 5% • College is the lender; payment is owed to the college that made the loan	• Undergraduate students: up to $5,500 • Graduate and professional degree students: up to $8,000
   Direct Subsidized (Stafford) Loan	• For undergraduate students who are enrolled at least half-time* and demonstrate financial need. • Interest is 3.4% for loans made to undergraduate students between July 1, 2011 and June 30, 2013. • Student is not charged interest on the loan while in school. • Effective July 1, 2012, borrowers will be charged interest during the grace period. • The U.S. Department of Education (ED) is the lender; payment is owed to ED
   Direct Unsubsidized (Stafford) Loan	• For undergraduate and graduate students who are enrolled at least half-time* • Interest is 6.8% • Student is responsible for interest during all periods • ED is the lender; payment is owed to ED
   Direct PLUS Loan for Parents	• For parents of dependent students • Dependent students must be enrolled at least halftime* • Interest is 7.9% • Parent must not have negative credit history • Parent is responsible for interest during all periods • ED is the lender; payment is owed to ED	Maximum amount is cost of attendance* minus any other financial aid the student receives
   Direct PLUS Loan for Graduate & Professional Students	• For graduate and professional degree students who are enrolled at least half-time* • If the student has not requested the annual maximum Unsubsidized Stafford Loan amount they are eligible for, the school must notify the student of this eligibility and give them the opportunity to request it. • Student must not have negative credit history • Interest is 7.9% • Student is responsible for interest during all periods • ED is the lender; payment is owed to ED	Maximum amount is cost of attendance* minus any other financial aid the student receives