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Few high school seniors, after graduation, will be able to afford to pay for their college tuition up front. Many people that go to college fund their education with student loans.

The student loan that is most popular these days is the federal student loan. Many federal loan types exist for students. The ones that are used the most are subsidized and unsubsidized loans.

Subsidized loans are for college goers that have an appropriate financial need (decided by the Federal Government). The student does not have to pay interest as long as they are in school on a full or part time basis, grace or deferment periods.

An unsubsidized loan is for students and it is not dependent on financial need. Students will have to pay interest with this loan. This includes the times when the student is enrolled in school, grace and deferment periods.

A type of unsubsidized loan is a PLUS loan (Parent loan). This type of loan is one that parents get to pay for their children’s college. They are also used for graduate and professional students. Education expenses are paid for by federal student loans. During this time, interest is charged throughout.

Federal student loans have an easy application and approval process. Students are required to fill out a FAFSA. (Free Application for Federal Student Aid) Online submission has really streamlined the process.

Students must have their application completed and submitted by June 30 of every year. Parents will have to submit their most up to date tax information if they have a dependent student. If the student is not living with their parents, they are required to submit their own tax information.

The interest on these loans is low and the monthly payments are reasonable. After you have been away from college for about nine months, repayment will begin. Federal student loans must be paid back.

After you get out of college, and if you are not employed you can get an extension for a certain period of time. Failure to pay back these loans can get the borrower in trouble. The Federal Government has the authority to impose a number of penalties since they are federal student loans.

You can expect the Federal Government to withhold tax refunds, garnish wages, or litigate in court as a penalty for failure to pay back the loan. Student loans cannot be included in a bankruptcy according to the Federal Government.

Federal student loans are some of the best loans for students to have. Each student’s financial need can be met by choosing the right student loan.