Federal student loan programs are the largest source of funds for college loans. This is amended by Title IV of the Higher Education Act in the United States. These loans are distributed directly and available to different university and college students who needs it. It can also be used to support personal and family needs, grants, work-study and scholarships. Sometimes the U.S. Government will subsidize these funds and sometimes not and these depends on the financial need of a student.

Almost all students can avail of the benefits of federal student loan programs, it does not matter what your credit score is and your financial standing. These kind of loans were made to help people who have limited financial resources for college.

The two major federal student loan programs are William D. Ford Federal Direct Loan Program (FDLP) and the Federal Family Education Loan Program (FFELP). There are some universities who participate in FDLP and offers similar terms with FFELP though the funds are borrowed from the US Department of Education.

On the other hand, FFELP can be obtained from private banks, education finance organizations and credit unions. This kind of loan has great terms which are:

• Lower interest rates that are rarely seen from other loans.
• The federal government can pay for your interest payments while the student is still in school.
• Payments for the loan may not be made while student is still in school.
• Longer re-payment terms.
• Flexible credit requirements can be made available to the student.

These two major kinds of federal student loan programs both offer six months grace period. This means that after the student has graduated he is given six months before he starts paying back the loan. The student may not also payback the loan until he is less-than-half-time student.

So, no matter what kind of loan you get the important thing is that your future being a college student and graduating will not be lost.

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