Federal student loan

Federal student loans for undergraduates

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What are federal student loans?

Federal student loans are low-interest loans issued directly by the federal government. They often have interest rates significantly lower than private loans, making them a more affordable choice for borrowing money. You are automatically considered for federal loans when you file your FAFSA. See which type of federal loan may be right for you.

Types of federal student loans for undergraduates:

Subsidized Loan

Choose a Direct Subsidized Loan if you are an eligible undergraduate student who demonstrates financial need and will attend a college or career school.

Unsubsidized Loan

Choose a Direct Unsubsidized Loan if you are an eligible undergraduate, graduate or professional student who does not have financial need.


 

student woking on computer

To apply for a federal student loan, you need to:

  1. Complete the FAFSA.
  2. Complete loan entrance counseling, a 30-minute online session designed to help make sure you understand your responsibilities as a borrower.
  3. Sign a Master Promissory Note, a binding legal document that contains the terms and conditions of the loan and information on how you’re going to repay it. Read it closely and make sure you understand it before signing.
Review your loan limits
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What are the federal student loan limits?

Undergraduate student

If you are an undergraduate student, the maximum amount you can borrow each year in Direct Subsidized Loans and Direct Unsubsidized Loans ranges from $5,500 to $12,500 per year, depending on what year you are in school and your dependency status.

Graduate student

If you are a graduate or professional student, you can borrow up to $20,500 each year in Direct Unsubsidized Loans. Direct PLUS Loans can also be used for the remainder of your college costs, as determined by your school, not covered by other financial aid.

Parent /dependent undergraduate student

If you are a parent of a dependent undergraduate student, you can receive a Direct PLUS Loan for the remainder of your child’s college costs, as determined by his or her school, not covered by other financial aid.

For more details on federal student loan limits, visit the student loan limits page.

How to receive your student loan

Get a financial aid offer

After you complete the FAFSA, you’ll get a financial aid offer letter that explains all the types of aid available to you, including how much loan money you’re eligible for. You have to decide if you want to accept all of the loan, part of it or none of it.

Sign into My ASU

Once you decide whether you’re going to accept or decline your loans, sign into My ASU and click “accept” or “decline” if it’s a Federal Direct Subsidized or Unsubsidized loan. If it’s a Federal Parent Plus loan, your parents will have to complete some additional steps too, so give them a head’s up.

Watch video: How to accept or decline loans.

Getting your loan money

Here’s the part you’ve been waiting for — receiving your loan. The first half of your funds will disburse in the fall and the second half in the spring. You also have to be enrolled for at least six credits if you’re an undergraduate, and five if you’re a graduate student, to get your money. Then, you can start paying your expenses. We suggest you sign up for direct deposit so the loan money goes straight to your account.

Watch video:  How to enroll in direct deposit.

 

How to pay back federal student loans.


You’ll have a variety of repayment plans you can choose from when it comes time to pay off your loan. Check out each one and all the details below, and note that some plans have specific criteria you must meet to be eligible.

View repayment plans
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Federal student loan repayment plans

You’ll have a variety of repayment plans you can choose from when it comes time to pay off your loan. Check out each one and all the details below, and note that some plans have specific criteria you must meet to be eligible.

Standard

Monthly payment

Payments are a fixed amount that ensures your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Eligibility

All borrowers.

Good to know

  1. You’ll usually pay less over time than under other plans
  2. Standard Repayment Plan with a 10-year repayment period is not a good option for those seeking Public Service Loan Forgiveness (PSLF)

Graduated

Monthly payment

Payments are lower at first and then increase, usually every two years, and are for an amount that will ensure your loans are paid off within 10 years (within 10 to 30 years for Consolidation Loans).

Eligibility

All borrowers.

Good to know

  1. You’ll pay more over time than under the 10-year Standard Plan.
  2. Generally not a qualifying repayment plan for PSLF.

Extended

Monthly payment

Payments may be fixed or graduated, and will ensure that your loans are paid off within 25 years.

Eligibility

If you’re a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.

Good to know

  1. Your monthly payments will be lower than under the 10-year Standard Plan or the Graduated Repayment Plan.
  2. You’ll pay more over time than under the 10-year Standard Plan.
  3. Not a qualifying repayment plan for PSLF.

Revised - Pay as you Earn

Monthly payment

Eligibility

Any Direct Loan borrower with an eligible loan type may choose this plan..

Good to know

  • Your monthly payments will be 10 percent of discretionary income.
  • Payments are recalculated each year and are based on your updated income and family size.
    1. You’ll usually pay more over time than under the 10-year Standard Plan.
    2. You may have to pay income tax on any amount that is forgiven.
    3. Good option for those seeking PSLF.

Revised Pay as you Earn

Monthly payment

  • Your monthly payments will be 10 percent of discretionary income, but never more than you would have paid under the 10-year Standard Repayment Plan.
  • Payments are recalculated each year and are based on your updated income and family size.

Eligibility

You must have a high debt relative to your income..

Good to know

  1. Your monthly payment will never be more than the 10-year Standard Plan amount.
  2. You’ll usually pay more over time than under the 10-year Standard Plan.
  3. You may have to pay income tax on any amount that is forgiven.
  4. Good option for those seeking PSLF.

Income-contingent

Monthly payment

    20 percent of discretionary income, or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.
  • Payments are recalculated each year and are based on your updated income, family size, and the total amount of your Direct Loans.
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Eligibility

Any Direct Loan borrower with an eligible loan type may choose this plan.

Good to know

  1. You’ll usually pay more over time than under the 10-year Standard Plan.
  2. You may have to pay income tax on any amount that is forgiven.
  3. You may have to pay income tax on any amount that is forgiven.
  4. Good option for those seeking PSLF.

Income-sensitive

Monthly payment

Your monthly payment is based on annual income, but your loan will be paid in full within 15 years.

Eligibility

Available only for FFEL Program loans, which are not eligible for PSLF.

Good to know

  1. You’ll usually pay more over time than under the 10-year Standard Plan.
  2. The formula for determining the monthly payment amount can vary from lender to lender.

Federal Perkins Loans

ASU is your lender, and you’ll repay ASU once your Perkins Loan moves to repayment status (typically nine months after graduation, withdrawl from school or dropping below half-time enrollment). Monthly payments depend on your loan amount and length of your repayment period. Payments can be made online. For complete details on repaying your Federal Perkins Loan, visit tuition.asu.edu/perkins-loan-repayment.

Pro tip: ASU partners with iGrad, a free resource for ASU students and alumni that helps you understand your loan repayment options and set up a payment plan that works for you. Learn more.

Visit studentaid.gov for more details about repayment plans.

Federal student loan FAQs

Will there be federal student loan forgiveness?

For more information on student loan repayment, please visit tuition.asu.edu/financial-aid/loans/repayment.

The Public Service Loan Forgiveness program might forgive student debt in certain circumstances. It is for federal student loan borrowers who work in a wide range of public service jobs, including government and nonprofit 501(c)(3) organizations. It may forgive remaining debt after 10 years of eligible employment and qualifying loan payments. Learn more.

Can you refinance federal student loans?

You can’t refinance a federal student loan into another federal loan but you might be able to refinance it into a private loan. Be cautious though — even though you may end up with a lower interest rate by refinancing into a private loan, a federal loan comes with certain protections that might help you keep from defaulting if you are ever having trouble making payments. Most private loans do not have these safeguards, and once you refinance into a private loan, there is no going back into a federal loan.

Explore other types of loans

 

 

federal student loans

Federal student loans

Learn about federal loans
private student loans

Private student loans

Lean about private loans
Parent plus loan

Parent plus loan

Learn about parent loans
private student loans

Grad PLUS loans

Learn about grad loans
Return to main student loan page
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