Facts of the Month

Do the Federal Direct Student Loan First!

During the 2009-2010 academic year undergraduate student financial aid came from the following:

• 32% =federal and state grants
• 17% = college/university grants
• 4% = private/employer grants
• 4% = federal tax credits and deductions
• 1% = federal work study

That means 43% came in the form of federal loans . . . and yet 65% of undergraduate students didn’t take out any federal student loan! If a student or parent needs to borrow money to pay for college, for most the federal student loan should be the first option because the student doesn’t pay any of the principal back until the student is out of college and the interest rate is typically lower than a student or parent can get anywhere else. The added bonus for parents: they don’t have to co-sign the loan. Any student who is a citizen or Permanent Resident (green card) typically can borrow the federal Direct Loan.

Publication Date: January 2011