Federal Direct Loans

What are federal college loans, and how do you get them?

If a cornerstone of the American dream has long been the ability to attend college even for those of modest means, federally guaranteed student loans are the main vehicle for accomplishing the task.

But how do you go about getting Federal Direct college loans?

Securing a federal direct loan begins with filing the FAFSA form, short for Free Application for Federal Student Aid, the nationally standardized method for assessing a family's finances and thus their ability to shoulder part of the costs of their children's post-secondary education. Since it's good to file the FAFSA as soon after the first of the year as possible, you may want to file your tax returns early, since that tax information is a key part of what goes into the application.

Within about a month of submitting your FAFSA to the U.S. Department of Education (which you can do online, at www.fafsa.ed.gov), your family and the schools to which your child has applied will receive a Student Aid Report (SAR). If you qualify for federal direct loans, these will be listed. It includes your expected family contribution, or EFC, which in turn becomes the basis for all loans, insofar as these loans must cover the difference between your EFC and what you can actually afford to pay out of pocket.

There are two main types of federal direct student loans, subsidized loans (which are need-based, and for which the government pays the interest while a student is in school and during any grace periods or deferments which may follow) and unsubsidized loans, which are not need-based, on which the borrower pays all interest. But all are administered and channeled through the school your child will ultimately be attending.

Learn more about affordable college financing options

After grants, scholarships and federal aid have been maximized, a private student loan is a good option to fill any remaining financing gap. Find out more information about Citizens Bank's TruFit Student Loan®. If you still have questions, call a student loan specialist at 1-800-708-6684, and we'll help walk you through the process.