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Federal Student Loans There are three specific types of federal student loans: Federal Perkins Loan The first is the Federal Perkins loan. The Federal Perkins loan is available to the graduate and undergraduate level student and includes a reasonably low interest rate of 5%. This loan is unique because the student's school acts as the middleman, dealing with the administration and the reimbursements of the loans, but is funded entirely by the Federal Government. Its main purpose is to help those students with special financial needs obtain a post secondary degree and as a result, not every candidate is approved. Federal Stafford Loan The second Federal Student loan is the Federal Stafford loan. This type of loan resembles the Perkins loan with a few small differences. The interest rate remains approximately 6% and the proceeds can be used towards any educational fees including living expenses, tuition, and books. Federal Parent Loan Lastly, the third Federal Student loan is the Federal Parent loan. This is the most common of the three and is designed for the dependant student. It gives the opportunity to parents and legal guardians with good credit histories help pay for the education expenses by taking out a loan themselves. The student in question must be enrolled in a minimum of part time courses, and the funds obtained must be used towards expenses directly related to the education of the student, and to his or her living expenses. This loan has no limit, all applicants are eligible, and the funds are available within the first few weeks of school.
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