Federal Student loans can help cover the cost of college but they must be repaid, many times with a high interest rate. Two US Department of Education loans are The William D. Ford Federal Direct Loan Program and The Federal Stafford Loan.

The Federal Stafford Loan offered by the Department of Education which can be subsidized or non-subsidized. Subsidized means the Federal Government pays the interest during select times while non-subsidized has no federal aid. The subsidized loans are for low-income undergraduate students with high financial help needs.

William D. Ford Federal Direct Loan is the largest loan lender through the US Department of Education. In this program there are 4 types of loans available: Direct Subsidized Loans, Direct non-subsidized Loans, Direct PLUS Loans & Direct Consolidation Loans.

There is also the Sallie Mae Career Training Smart Option Loan. Interest is usually lower than the market rate so the payback isn’t as difficult.

Sallie Mae Career Training Smart Option Loan – A loan for the entire cost of school with a choice of repayment options. Payment starts upon receiving the loan money, at low interest rates. 6 months after graduation full payment + interest begins.

Federal loans have a fixed interest rate much lower than credit card rates. Interest rates on Federal loans are also tax deductible. If there is financial hardship, the debt repayment can be postponed or payments can be lowered. There is no prepayment penalty and a portion of your loan can also be forgiven if you work in public service.

To get a Federal Loan, you must fill out the FAFSA. Based on the result of the FAFSA, a financial aid offer will be sent out by the technical college or trade school where you’re enrolling. Before any money is given the student will have to complete entrance counseling. This explains your  loan obligation so that the loan my be signed.