A loan is a money you borrow and must pay back with interest. If you apply for a financial aid, you may be offered a loan as part of your school’s financial aid offer.
Students and parents can explore the site and access direct, first hand information about the Federal Student Loan Program, which includes some tools, related resources, and other helpful publications to help search and manage direct loans.
The Federal Student Aid is the US Department of Education’s site for free information on preparing for and helping the student fund education beyond high school.
If you decide to take out a loan, make sure you understand who is making the loan and the terms and conditions of the loan. Student loans can come from the federal government or from private sources, such as a bank or financial institution.
Loans availed through the federal government, called federal student loans, usually offer borrowers lower interest rates and have more flexible repayment options than loans from banks or other private sources.
The name “Obama Student Loan Forgiveness” has become the nickname for a program actually called the William D. Ford Direct Loan program. Many people only know about the program, and have heard of it through others as the Obama Student Loan Forgiveness program.
The name came about when President Obama reformed part of the Direct Loan program in 2009 in his Health Care and Education Reconciliation Act of 2010. It is important to keep in mind all the programs are offered for federal student loans. Private loan borrowers are not able to benefit from any of the below information.
The U.S. Department of Education has two federal student loan programs:
The William D. Ford Federal Direct Loan (Direct Loan) Program is the largest federal student loan program. Under this program, the U.S. Department of Education is your lender. There are four types of Direct Loans available:
The Federal Perkins Loan Program is a school-based loan program for undergraduates and graduate students with exceptional financial need. Under this program, the school is lender.
If you have questions about Perkins Loan eligibility, please contact your school’s financial aid office.
To better understand the Federal Student Loan Programs, please visit https://studentaid.ed.gov/sa/sites/default/files/federal-loan-programs.pdf
Or read the PDF belowfederal-loan-programs
Federal student loans allow students and their parents to borrow money to pay for a college or career school education. A federal student loan is made through a loan program administered by the federal government.
A private loan is a nonfederal loan made by a private lender, such as a bank or credit union. The terms and conditions of private student loans are set by the lender, not the federal government.
If you’re not sure whether you are being offered a private loan or a federal loan, check with the financial aid office at your school.
If you are an undergraduate student:
Remember, you can borrow less than what your school offers you. You should only borrow what you need. Why should I take out federal student loans?
Federal student loans are an investment in your future. You should not be afraid to take out federal student loans, but you should be smart about it.
Before you take out a loan, it’s important to understand that a loan is a legal obligation that you will be responsible for repaying with interest.
You may not have to begin repaying your federal student loans right away, but you don’t have to wait to understand your responsibilities as a borrower.
Is the U.S. Department of Education responsible for HEAL Program loans?
Yes. On July 1, 2014, the Health Education Assistance Loan (HEAL) Program was transferred from the U.S. Department of Health and Human Services (HHS) to the U.S. Department of Education (ED). However, it is no longer possible to obtain a new HEAL Program loan. The making of new HEAL Program loans was discontinued on September 30, 1998.
Before it was discontinued, the HEAL Program insured loans made by participating lenders to eligible graduate students in schools of medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry, public health, pharmacy, chiropractic, or in programs in health administration and clinical psychology.
ED is responsible for managing the servicing of nondefaulted HEAL Program loans and the collection of defaulted HEAL Program loans that remain.
Borrowers who have HEAL Program loans and members of the community may obtain more information as outlined below.
If you have HEAL Program loans and are not in default on those loans, contact your loan servicer for help with account-related questions. Use the contact information your loan servicer provided to you.
If you have HEAL Program loans and are in default on those loans, contact the Debt Collection Center for help with account-related questions:
Debt Collection Center
Program Support Center
12501 Ardennes Ave
Rockville, MD 20857
If you have a general HEAL Program question (not a loan account question), contact ED’s HEAL Program Team at 1-844-509-8957 or HEAL@ed.gov.
To apply for a federal student loan, you must complete and submit a Free Application for Federal Student Aid (FAFSA®).
Based on the results of your FAFSA, your college or career school will send you a financial aid offer, which may include federal student loans.
Your school will tell you how to accept all or a part of the loan.
Contact the financial aid office at the school you are planning to attend for details regarding the process at your school.
Read more about the loan here https://studentaid.ed.gov/sa/types/loans