Federal Student Loans: Where Do I Apply?

Federal student loans are going to be a reality for most college students whether they will be freshmen in the fall or returning students.

I’ve started getting questions about student loans from my college blog visitors so I’m going to start tackling them periodically.

Here is the first student loan question in the queue:

1. Where do I apply for federal student loans?

Congress recently passed landmark student loan legislation (it was actually part of that massive healthcare bill) that will make it easier for students to obtain federal college loans. Thanks to the new law, all students who are seeking federal Stafford loans, which is the most popular loan program, will receive them through their colleges beginning in the 2010-2011 school year.

Until now, students at many schools faced a bewildering number of Stafford student loan possibilities on the marketplace.  Now all students will receive the same Stafford loan via their schools through a direct federal government loan program. Students at some colleges have always used the direct loan program, but many didn’t.

Besides allowing one-stop shopping, the federal government will save billions of dollars through the direct loan program because it will no longer have to provide student loan lenders with huge subsidies to participate in the plan.

Here are maximums that students can borrow through a Stafford:

  • 1st year:                            $5,500
  • 2nd year:                            $6,500
  • 3rd year and above:          $7,500

If you did not file a Free Application for Federal Student Aid (FAFSA), you will not be able to obtain a Stafford loan. Don’t worry, there is still time to complete the FAFSA. I’d do it this weekend.

Lynn O’Shaughnessy is the author of The College Solution and she also writes about college for CBSMoneyWatch. Follow her on Twitter!

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