Definition
Loans for college or career school from the U.S. Department of Education, with fixed rates and protections private loans may not have.
What it means
Federal student loans come from the Department of Education's Direct Loan program after you file the Free Application for Federal Student Aid (FAFSA). Rates are fixed for the life of each loan and are set every July 1 for new loans. Undergraduate subsidized loans do not charge interest while you are in school at least half time; unsubsidized loans do. A 2025 federal law changed borrowing limits and repayment: for loans made on or after July 1, 2026, Grad PLUS loans ended for new borrowers and new limits apply to graduate and parent borrowing. Federal loans offer options such as deferment, forbearance, income-driven repayment and Public Service Loan Forgiveness. Private student loans come from banks and other lenders, and their terms and protections depend on the contract.
Example
A $30,000 balance at a 6.39% fixed rate repaid over 10 years has a payment of about $339 a month and about $10,700 in total interest.
Illustrative numbers only. Your situation will differ.