Student loans

Federal Direct Student Loan Program | Lord Fairfax Community College

Paying for your studies can be a big responsibility. Understanding the difference between a federal and a private loan and your debt consolidation and settlement options can save you thousands of dollars.

Some companies promise to help you reduce your student loan debt, but whatever they can do, you can do it yourself for free. And some of the companies that promise to alleviate your student loan debt are scams. It is illegal for a company to charge you before helping you.

How to finance your education

There are several types of aid available to pay for your education after high school, including grants and scholarships, federal work-study jobs, and student loans. The first step is to complete the Free Application for Federal Student Aid (FAFSA) form at

Grants and scholarships

Grants and scholarships are free money. They should be your first choice for financing your education. Why? Because you should not pay them. A good way to apply for a grant is through the FAFSA form . You can also explore these other resources to find out about scholarship and grant opportunities:

  • the financial aid office at a college or vocational school
  • a high school or TRIO counselor
  • the free scholarship search tool from the United States Department of Labor
  • federal agencies
  • your state
  • your library
  • foundations, religious or community organizations, local businesses, or civic groups
  • organizations related to your field of interest, such as professional associations
  • ethnicity-based organizations
  • your employer or your parents’ employers

Federal work-study jobs

Federal work-study jobs are another way to help pay for college. This type of employment is a needs-based allowance, which requires you to work part-time while you are studying. To qualify for work-study employment, you will need to complete the FASFA form and meet the program’s “needs-based” criteria. You will only be paid for the hours you work.

Student loans

Student loans fall into two categories: federal loans and private loans.

Federal loans include:

  • Direct loans, where the US Department of Education is the lender;
  • Federal Family Education Loans (FFEL), where private lenders make loans backed by the federal government;
  • Federal Perkins Loans, low-interest federal student loans for undergraduate and graduate students with exceptional financial need; 

PLUS loans, federal loans that can be used by graduate or professional students and parents of dependent undergraduate students to help pay for college or vocational school.

Private loans , sometimes called “alternative loans,” are offered by private lenders, such as banks and credit unions, and do not include the benefits and protections that federal loans offer.


FAFSA is short for Free Application for Federal Student Aid . It is the only way to apply for federal student aid. The application is free. You must complete the FAFSA form at each year you are in college or trade school.

Also, many states use the information on your FAFSA form to determine your eligibility for state or college aid. Some private financial aid providers use the information from the FAFSA to determine if you are eligible for their aid options.

Complete the FAFSA form for free at .


When you complete your FASFA, you will also create an FSA ID. FSA ID is short for Federal Student Aid Identification. It is a username and password that you create. You use your FSA ID to:

enter the Federal Student Aid system.

complete the FAFSA form.

legally sign your student aid documents.

Only you can create and use your FSA ID. Do not share your FSA ID with anyone else. Dishonest people can use your FSA ID to log into your account and take control of your personal information.

Payment and forgiveness of loan debt

Student loans are a debt that you must pay back, even if you don’t finish your degree. However, depending on your situation and the type of loan you have, you may be eligible to make a different repayment plan or to receive a forgiveness of your loan debt. And when it comes to qualifying for these programs, there is nothing a private company can do for you that you cannot do yourself for free.

Federal loans

If you have federal loans, the Department of Education has free programs that may help you, including:

payment plans based on your income: your monthly payment is based on the amount of money you earn

deferred or grace payment: you can postpone payments, if you have a good reason not to do so right now, although this would mean that the interest on what you owe increases

Debt forgiveness or discharge: In some situations, you don’t have to pay off some or all of your loan debt. You may qualify if, for example, you work for a government or non-profit organization, if you have a disability, or if your university or school closed or committed fraud. Also, under certain income-based payment plans, any remaining balance after 20 or 25 years of payment is forgiven. In some cases, you may owe income tax on the amount forgiven or released.

These options are free. You can learn more at the Department of Education’s / repay site or by contacting your federal student loan servicer . You can also find out how to get out of your delinquent state .

Private loans

With private loans, you often have few payment options, especially when it comes to forgiveness or cancellation of loan debt. To explore your options, contact your loan servicer directly. If you don’t know who your servicer is, see your latest loan statement. Read more information about Strategic default private student loans here.