Looking for government student loans to help pay for college?
The federal government and some state governments provide student loans to qualifying students. To see if you qualify, file the FAFSA or apply for an available loan program directly. Borrow only what you need to avoid hefty student loan payments in the future.
Continue reading to learn about the different types of federal student loans and the available state-sponsored student loan programs.
Federal Student Loans
The federal government offers four different types of Direct Loans under the William D. Ford Federal Direct Loan (Direct Loan) Program: Direct Subsidized, Direct Unsubsidized, Direct PLUS, and Direct Consolidation. Only students who file a FAFSA are eligible for federal loans, so make sure you file every year.
Borrowing federally offers several perks like automatic deferment while you or your child is still enrolled in school. Federal student loans are also eligible for student loan repayment programs, forgiveness programs, and total and permanent disability discharge. This means there’s a way out if you become too sick to work or face financial hardship.
Direct Student Loans
Students who file the FAFSA automatically apply for the Direct Loan program. Depending on your financial need and student status, you might qualify for a subsidized loan and/or an unsubsidized loan. Your credit score does not affect your eligibility. The program provides students with a low-interest, fixed-rate loan and flexible repayment options.
Direct loans disbursed to undergraduate students between July 1, 2019 and July 1, 2019 have a 4.53% interest rate. Direct loans disbursed to graduate students have a 6.08% interest rate. All Direct loans disbursed between October 1, 2019 and October 1, 2020 also have a loan fee of 1.059%.
How much you can borrow through the Direct Loan program depends on your year in school, your student status, and the type of loan you’re taking out.
Federal Student Loan Borrowing Limits 2019-2020
|Year||Dependent Borrowers’ Annual Award Limit||Independent Borrowers’ Annual Award Limit|
|1st Year Undergraduate||$5,500 (max of $3,500 in subsidized)||$9,500 (max of $3,500 in subsidized)|
|2nd Year Undergraduate||$6,500 (max of $4,500 in subsidized)||$10,500 (max of $4,500 in subsidized)|
|3rd Year & Beyond Undergraduate||$7,500 (max of $5,500 in subsidized)||$12,500 (max of $5,500 in subsidized)|
|Graduate or Professional Student||N/A||$20,500 (only unsubsidized)|
Unsubsidized vs. Subsidized Direct Loans
Undergraduate students who demonstrate financial need on the FAFSA are eligible to borrow a Direct Subsidized Loan. The government pays the interest on subsidized loans while the student is still in college. Subsidized loans are also eligible for interest forgiveness.
All undergraduate, graduate, and professional students who file a FAFSA are eligible to borrow a Direct Unsubsidized Student Loan. A Direct Unsubsidized Loan doesn’t include the perk of interest assistance or forgiveness. Interest starts accruing as soon as you take out the loan, meaning these loans are more costly than subsidized loans.
Direct PLUS Loans
Direct PLUS Loans help parents and graduate students secure the necessary funding for their own graduate education or for their child’s undergraduate education. You can borrow up to the cost of attendance minus any other financial aid.
PLUS loans have fixed interest rates and flexible repayment terms. All PLUS Loans distributed between July 1, 2019 and July 1, 2020 have a fixed interest rate of 7.08%. Loans disbursed from October 1, 2019 to October 1, 2020 also have a 4.236% loan fee.
Although interest rates are the same for everyone, the federal government still runs a credit check when processing applications. You must not have an adverse credit history to qualify.
Parent PLUS Loans
When borrowed by parents, Direct PLUS loans are called Parent PLUS loans. To receive a Parent PLUS loan, you must be the biological or adoptive parent of a dependent undergraduate student that’s enrolled at least half-time at a qualifying school and both you and your child need to meet federal student aid eligibility requirements.
Grad PLUS Loans
When borrowed by graduate or professional students, Direct PLUS loans are called Grad PLUS loans. To receive a Grad PLUS loan, you must be a degree- or certificate-seeking graduate or professional student enrolled at least half-time at an eligible school and meet federal student aid eligible requirements.
Direct Consolidated Loans
Borrowers with loans in repayment or in the grace period can consolidate multiple federal student loans into a Direct Consolidation Loan. This means one monthly payment instead of multiple. Plus, it makes you eligible for the various federal student loan repayment plans and forgiveness programs.
A consolidated federal student loan has a fixed interest rate. It’s the weighted average interest rate of your combined eligible federal student loans rounded up to the nearest 1/8 percentage. You can choose which loans to include in a consolidated loan and which to leave out.
State Government Student Loans
Several states offer student loan programs for state residents and for nonresidents attending an in-state college or university. Scroll to see if your state or the state you’re studying in offers a student loan program.
The Alaska Commission on Postsecondary Education offers low-cost Alaska Education Loans to students and their families. Funds can be used for college or career training. You must be an Alaskan resident or a student at an eligible Alaskan college or university to apply. The loans have zero fees, but interest rates (and your eligibility) are dependent on your credit score.
The Arizona Teacher Student Loan Program awards need-based forgivable loans to students planning to teach in an Arizona public school. You can receive up to $7,000 per academic year for up to three years. If selected for the loan, you must commit to teach in an Arizona public school for the number of years you received the loan plus one year. If you fail to fulfill that obligation, you must pay back the loan plus interest.
Connecticut students age 18 and up can apply for a loan from CHESLA. These low-cost, fixed-rate loans currently have a 5.15% fixed rate for the 2019 to 2020 academic year. Not everyone who applies receives a loan. You must meet credit score requirements by yourself or with the help of a cosigner.
The Georgia Student Finance Commission sponsors the Student Access Loan (SAL) Program, which grants 1% interest loan to financially needy students. Students must pay $10 per month while in school and while in their grace period. The minimum annual loan amount is $500, and the maximum annual loan amount is $8,000.
Georgia also sponsors several cancelable loan programs. Students must fulfill a service obligation to cancel the full amount of the loan. If not, the student must pay back the loan amount plus interest.
- Georgia National Guard Service Cancelable Loan
- Georgia Military College State Service Scholarship Cancelable Loan
- Scholarship for Engineering Education (SEE) Service Cancelable Loan
- Scholarship for Engineering Education for Minorities (SEE) Service Cancelable Loan
The Maine Loan helps Maine residents cover the college costs that aren’t being paid for by scholarships, grants, and federal financial aid. Maine Loan’s fixed interest rates are 4.49%, 5.49%, or 6.49% depending on the repayment plan you choose. You can borrow up to the full cost of attendance minus financial aid.
The Minnesota Office of Higher Education administers the SELF Loan to Minnesota residents enrolled at an eligible institution and to nonresidents attending an eligible Minnesota institution. You can borrow up to $20,000, $7,500, or $3,000 depending on your program. Student borrowers are required to have a cosigner and to make quarterly interest payments while in school. Interest rates are the same for everyone and not based on your credit score.
Undergraduate and graduate students enrolled at least half-time in a New Jersey school or NJ residents attending an out-of-state school can apply for a low-interest Standard NJCLASS Loan. You can borrow up to the cost of attendance minus financial aid. Three fixed interest rates are available based on the repayment term you choose. NJCLASS loans offer lower interest rates than Federal Plus Loans; view a comparison of the NJCLASS loans and Federal PLUS loans here.
North Carolina’s NC Assist Loan program lends to students and parents based on credit-worthiness. Students can add a cosigner if needed. Loans are fee-free and have a fixed interest rate, which drops by 0.25% with autopay. They’re a cheaper alternative to Grad PLUS and Parent PLUS loans, but you do miss out federal borrowing protections. You can borrow up to the cost of attendance minus any financial aid.
The NC Student Assist Loan is for NC residents attending any qualifying institution and for non-residents attending an eligible non-profit Title IV school in North Carolina. It has a 5.75% interest rate. The NC Parent Assist Loan is for North Carolina residents or parents of a student attending an eligible North Carolina school. It has a 5.5% interest rate.
The Bank of North Dakota offers DEAL Student Loans to undergraduate and graduate students. To qualify, you must complete the FAFSA, meet credit requirements by yourself or with a cosigner, and be an ND resident or be a non-resident attending an ND school. Choose between a 4.74% fixed interest rate or a 3.93% variable interest rate.
The Rhode Island Student Loan Authority (RISLA) is a non-profit quasi-state authority in Rhode Island. RISLA offers fee-free undergraduate, graduate, and parent loans of up to $45,000 per year. Fixed interest rates range from 3.64% to 5.64% depending on your repayment plan.
With RISLA loans, nurses, primary care practitioners, and college interns are eligible for perks like partial loan forgiveness or interest rate reduction. An income-based repayment plan is available to qualifying borrowers too.
In Texas, the Minnie Stevens Piper Foundation Student Loan Program is available for graduate students and undergraduate juniors and seniors who are Texas residents and enrolled full-time at a Texas college or university. An approved student can borrow a maximum of $10,000 at a fixed 4% interest rate. Students must repay the full loan amount within one year of graduating or within four years of graduating if approved for a monthly payment plan.
Students and parents in Vermont can borrow a VSAC Student Loan or VSAC Student Loan for Parents from Vermont’s nonprofit state agency, VSAC. To qualify, you must be a Vermont resident or a nonresident attending a Vermont school. VSAC loans offer fixed interest rates that are lower than the federal Direct PLUS loans. Interest rates start at 4.79% for both parents and students who choose the immediate repayment plan.
Washington residents accepted to the Washington Aerospace Training and Research Center can apply for the Aerospace Loan Program. Approved applicants can receive up to $8,900 in loan funds, which must be repaid within four years of completing the program.
Private Student Loan Options
If you must borrow to attend college, exhaust your Direct Subsidized and Unsubsidized Loan options first. Then, you should compare private student loan options to Direct Plus and state-sponsored loan programs.
What are Private Student Loans?
Banks, credit unions, and online-only lenders offer private student loans to undergraduate and graduate students. Unlike government student loans, private student loans have competitive interest rates based on your credit score and income. This makes it hard for students get private loans without a cosigner.
Borrowing privately also means you miss out on federal borrowing protections like death and disability discharge, repayment plans, and forgiveness programs. For example, your private student loans aren’t eligible for forgiveness under the Public Service Loan Forgiveness Program even if your federal student loans are.
How Do I Choose a Private Lender?
Be smart about how you borrow private student loans by prioritizing lenders that offer these perks:
- Deferred payments while you’re enrolled at least half-time
- A six-month grace period after graduation
- A 0.25% interest rate deduction with autopay
- No origination fees or prepayment penalties
- Death and disability discharge
- Flexible repayment plans during times of unemployment or economic hardship
Many of our refinancing partners offer student loans with the above perks whether you’re refinancing or taking out a private student loan for the first time.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2019
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation. (2)$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. (3)This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 1/27/2021. Variable interest rates may increase after consummation.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
Ascent: Ascent Student Loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 10/01/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.