College costs keep climbing, and that can feel discouraging. The good news, federal student loans can help you cover your bill without risky terms. Compared to private loans, federal loans usually have lower fixed rates, income-driven repayment, and options like deferment and forgiveness. If you are asking what federal student loans are available, you are in the right place.
Here is the lineup: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. You will need the FAFSA to qualify for any of them. Up next, see how each loan works so you can borrow smart and keep debt in check.
What Are Direct Subsidized and Unsubsidized Loans?
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Direct Subsidized Loans are for undergraduates with financial need. The big perk, the government pays the interest while you are in school at least half-time, during the grace period, and during approved deferment. No credit check is required.
Direct Unsubsidized Loans are for undergraduates and graduate students, regardless of need. Interest starts the day the loan is disbursed. You can choose to pay interest while in school or let it capitalize, which increases what you owe later. No credit check is required.
For 2025 to 2026, the fixed interest rates are:
- 6.39% for undergraduate Subsidized and Unsubsidized Loans
- 7.94% for graduate Unsubsidized Loans
Typical limits:
- Dependent undergrads: $5,500 to $7,500 per year, total up to $31,000
- Independent undergrads: higher totals, up to $57,500
- Fixed rates, flexible repayment, and income-driven plans make these a smart first choice.
Key Differences Between Subsidized and Unsubsidized Loans
- Eligibility: Subsidized is need-based, Unsubsidized is not.
- Interest: Subsidized interest is paid by the government while in school, grace, and deferment. Unsubsidized interest is your responsibility from day one.
- Who can get them: Subsidized is for undergrads only. Unsubsidized is for undergrads and grads.
Example: If you borrow $5,500 as a first-year and stay in school for 4 years plus a 6-month grace period at 6.39%, a subsidized borrower avoids around $1,580 in accrued interest that an unsubsidized borrower would see added or paid over time. That is real savings.
How Much Can You Borrow with These Loans?
- First-year dependent undergrad: $5,500 total, up to $3,500 subsidized
- Second-year: $6,500 total
- Third year and beyond: $7,500 per year
- Dependent aggregate cap: $31,000
- Independent undergrad cap: $57,500
- Graduate students: Unsubsidized up to $20,500 per year, total $138,500 including undergrad borrowing
These annual and lifetime caps combine both subsidized and unsubsidized amounts. Prior loans count toward your totals.
| Feature | Subsidized | Unsubsidized |
|---|---|---|
| Need-based | Yes | No |
| Who can apply | Undergrads | Undergrads and grads |
| Interest while in school | Government pays | You owe from day one |
| Credit check | No | No |
Direct PLUS Loans: Options for Parents and Graduate Students
Direct PLUS Loans come in two types: Parent PLUS for parents of dependent undergrads, and Grad PLUS for graduate or professional students. They can fill the gap after grants, scholarships, and other federal loans.
- Rate: 8.94% fixed for 2025 to 2026
- Credit check required: no adverse credit, or use an endorser
- Limit: up to the cost of attendance minus other aid
- Interest: accrues immediately
Pros:
- Higher borrowing power
- Flexible use for remaining costs
Cons:
- Higher interest rate than other federal loans
- Origination fee around 4.2%
Who Qualifies for PLUS Loans and What Are the Costs?
- You must file the FAFSA, meet basic aid rules, and pass a credit check or get an endorser.
- Expect an origination fee near 4.2%, and a fixed 8.94% rate.
- Example: Borrow $20,000 on a 10-year plan at 8.94%. The payment is about $253 per month.
- Quick credit tips: pay on time, lower card balances, and fix errors on your credit report before applying.
Direct Consolidation Loans: Combining Your Federal Debt
A Direct Consolidation Loan combines federal loans into one monthly payment with a fixed rate, the weighted average of your rates, rounded up. It can simplify repayment and help you access certain forgiveness or repayment plans. It can extend your term, so you may pay more total interest. No credit check. You cannot include private loans. Apply at Studentaid.gov after you leave school.
Is Consolidation Right for Your Situation?
Pros: one bill, possible lower monthly payment, and easier tracking.
Cons: longer repayment can cost more, and you might lose original perks like future subsidized interest periods.
Example: combining $30,000 across 5% to 7% loans may land near 6.5%. Check how consolidation affects your forgiveness path before you proceed.
Eligibility Requirements and How to Apply for Federal Student Loans
General rules:
- U.S. citizen or eligible non-citizen with a valid SSN
- Enrolled at least half-time in an eligible program
- Not in default on federal loans
How to apply:
- Complete the FAFSA at Fafsa.gov each year.
- Review your school’s aid offer.
- Accept loans in your school portal.
- Complete Entrance Counseling and sign the Master Promissory Note online.
Use the Federal Student Aid Loan Simulator to estimate payments. Borrow only what you need. For 2025 to 2026, Subsidized and Unsubsidized Loans also carry a small origination fee near 1.06%.
Conclusion
Federal loans cover a wide range of needs. Subsidized suits undergrads with financial need. Unsubsidized works for most students. PLUS helps parents and grad students fill the gap. Consolidation simplifies repayment. Start with the FAFSA, compare options, and keep borrowing tight to your actual costs. Visit Studentaid.gov to run numbers and find a plan that fits. Federal loans offer protections like income-driven repayment and forgiveness that private loans usually do not.