What Is a Federal Student Loan?

Federal student loans are financial aid money that the government offers. They are included in a student's financial aid and must be repaid with interest. You must complete the Free Application for Federal Student Aid (FAFSA) form to get a federal loan. Once you get your financial aid package, you can accept some or all of your student loan amount.

Scholarships and grants are the best options because they do not have to be repaid. In terms of student loans, federal loans are the better option as they include many benefits that private loans do not have, like fixed interest rates, forgiveness, and repayment plans. Federal student loans have standardized, fixed interest rates, meaning the rate stays the same throughout the loan term.

The interest rate is fixed and is often lower than private loans. You also don’t need to get a credit check to qualify for federal student loans, unlike private loans, where your interest rate is based on your credit history. In terms of repayment, loan payments for federal student loans aren’t due until after you graduate, leave school, or change your enrollment status to less than half-time. They also have an extensive grace period before starting monthly payments.

There are large amounts of student loan debt in the United States, so it can be helpful to consider other financial aid options. On Bold.org, we have plenty of scholarships that students can apply for so they don't have to deal with student debt.