The Types of Loans

The federal government categorizes your loans in several different ways:

• Consolidated: This is a combined loan

from multiple semesters. For example,

if you consolidated loans after you completed

your undergraduate degree, you could have

eight semesters of loans in one consolidation loan.

• Subsidized: With a subsidized loan, the

government pays your interest while you

attend college and other special circumstances.

• Unsubsidized: With an unsubsidized loan,

you pay your own interest in all circumstances

• FFEL (Federal Family Education Loan)

Program: These loans are with a servicer

other than the government but they are federally backed loans and qualify

for most of the same repayment programs as direct loans. They can also

be consolidated to direct lending.

• Direct: This kind of loan is issued directly from the government

via direct lending as a servicer.

• Stafford: The most common type of federal loan, it can come in

many forms, such as consolidated or unconsolidated or subsidized

or unsubsidized. It can be serviced by either direct lending

or another servicer.

• Perkins: This category of student loans is fairly rare and is normally

reserved for low-income families. If you have these, you may

have additional options for loan forgiveness.