Types Of College Loans: Federal Student Loans For Career Are An Investment In Your Future

Student Loans In the United States are designed to help make colleges more affordable for students and their parents. College Loans are a form of financial aid used to help Graduate or Undergraduate Students access their education.

College Loans/Student Loans play a major role in higher Education In the United States. Every year 20 million Americans attend College for that 20 million close to 12 million or 60% borrow annually to help cover costs.

Student Loans are funds provided to a Student for Educational expenses and are considered self-help financial ads because you need to repay the money loaned to you.

Student Loans may be used for any college-related expenses which include Tuition, Room and Board, Study Books, Computers, and Transportation Expenses.

Student Education Loans come in several varieties in the United States but are basically split into Federal Student Loans and Private Student Loans.

The Federal Student Loans for which FAFSA is the Application are Subdivided into subsidized and Unsubsidized Loans. Federal student loans are subsidized at the undergraduate level only.

A Subsidized Loan is by far the best kind of Loan, but an Unsubsidized federal student loan is far better than a private student loan. Some states have their own loan programs, as do some colleges.

In almost all cases, these student loans have better conditions – sometimes much better – than the heavily advertised and expensive private student loans.

Federal Student Loans are the Investment in your Future you should not be afraid to take out Federal Student Loans and you need to be smart to take them.

There are lots of benefits and Advantages offered by Federal Student Loans compared to other options you may consider when you pay for College:

Features, Benefits & Advantages of College Loans- 


  • The Interest Rates on Federal Student Loans are almost always lower than that on Private Student Loans—and much lower than that on Credit Cards!
  • You don’t need a Credit Check or a cosigner to get most Federal Student Loans.
  • You don’t need to begin Repaying your Federal Student Loans until after you leave college or drop below half-time.
  • If you demonstrate financial need, you can qualify to have the Government Pay your Interest while you are in school or College.
  • Federal Student Loans May Offer Flexible Repayment Plans and options to postpone your Loan Payments if you’re having trouble making Payments.
  • If you’re working in Certain Jobs, you may be eligible to have a portion of your Federal Student Loans forgiven if you meet certain conditions.

Things You Know Before Taking Out Federal Student Loans-

Before Taking federal Loans you need to know that the Loan is a legal obligation that you will be responsible for Repaying with Interest.

You may not have to begin Repaying your Federal Student Loans right away, but you don’t have to wait to understand your responsibilities as a borrower. As a responsible borrower, You need to:

  • Keep track of how much you’re borrowing. Think about how the number of your Loans will affect your future Finances, and how much you can afford to repay. Your Student Loan Payments should be only a small percentage of your salary after you graduate, so it’s important not to borrow more than you need for your school-related expenses.
  • Research starting salaries in your field. Ask your school for the starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate.
  • You need to understand the terms of your loan and keep copies of your Loan Documents. When you sign your Promissory Note You are agreeing to Repay the Loan According to the Terms of the Note even If you don’t complete your education, can’t get a job after you complete the Program, or didn’t like the Education you received.
  • You are required to make payments on time even if you don’t receive a bill, Repayment Notice, or a reminder. You must pay the full amount required by your Repayment Plan, as Partial Payments do not Fulfill your Obligation to Repay your Student Loan on Time.
  • Keep in touch with your Loan Servicer. Notify your Student Loan Servicer when you Graduate, withdraw from school, drop below half-time status, Transfer to another school, or change your Name, Address, or Social Security Number. You’re also able to contact your Servicer If you’re having trouble making your Scheduled Loan Payments. Your Servicer has several Options available to help you keep your Loan in good standing.

How to Apply For a Federal Student Loan (College Loans)-

Applying for Federal Student Loans looks like a daunting process but it’s actually Very Simple and can be done mostly Online.

To make it easier, we’ve provided the Complete Step By Step Application Process For College Loan Below:

  • First, you’ll need to start by completing a FAFSA Form (or Renewal FAFSA for Returning Students). This form is required for both Current and Prospective US College Students (Undergraduate/Graduate) to determine their Eligibility for Financial Aid. It can be completed online and submitted directly to the Department of Education for Review.
  • The Student receives the Financial Aid Award Letters anywhere from 3 days to 6 weeks after submitting their FAFSA. Each letter will outline all of the Relevant Information regarding the Financial Aid Package being offered.
  • Upon Receiving these Letters, The Student will contact their chosen School’s Financial Aid Office to Accept the Student Loan Package being Offered.
  • Once The Student Loan Package is accepted, The Student will simply Review and sign any necessary paperwork associated with the Loans, such as a Master Promissory Note.

Types of Student Loans (Education Loans)-

There are two major sources of Student Loans i.e. Federal Student Loans And Private Student Loans. There were 21 Million students enrolled in College in Universities this year and 8 Million of them received Federal Student Loans William D. Ford Federal Direct Loan Program which includes Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.

College Loans come in many shapes and sizes and the regulations for them can be different for them. Federal Student Loans are made directly from the Department of Education to the Borrower.

These Loans Cover the full academic year and are distributed in two payments, One each semester. With the Federal Student Loans, The School determines the types of Student Loans and How much you can borrow.

The loans may only be used to cover tuition and direct cost of living expenses. All Payments must be made either directly to the School or the Department of Education.

There are limits on how much you can borrow based on whether the Loan is Subsidized or Unsubsidized and whether it’s for Undergraduate or Graduate Study.

1. William D. Ford Federal Direct Loan Program-

The William D. Ford Federal Direct Loan Program is the largest Federal Student Loan Program which is made up of four Different Types:

  1. Direct Subsidized Loans: These loans are designed for Undergraduate Students with Financial needs. The Student is not to be liable for the Interest on the Loan while Attending School or in any deferment Periods. You can take out up to $5,500 each year to pay for the School. Unlike other loans, you’re not charged interest on the loans while you are studying in the School. All the Interest on the Loan is Paid by The Department of Education while you’re in school (at least half-time), during your grace period, and during any period of deferment.
  2. Direct Unsubsidized Loans: These Loans are available for Undergraduate, Graduate, and Professional Degree Students. The parent would be responsible for the Interest on the Loan from The First Month. The Lender is the Department of Education, to which all the Loan Payments would be made. The Direct PLUS Loan for Parents has a maximum Lending Size equal to the cost of Attending College Minus other Financial Aid the Student has to receive. You can take out a maximum of $20,500 Every Year to Pay for The College, School, and Interest accrues on your account while you’re Studying in the School.
  3. Direct PLUS Loans: These Loans are Available for both the Parents and the Students. The parent would be responsible for the interest on the loan from the first month. The lender is the Department of Education, to which all the Loan Payments would be made. The Direct PLUS Loan for the Parents has a maximum Lending Size equal to the cost of attending College minus other Financial Aid the Student has to receive. The Lender for Direct PLUS Loans for Graduates is the Department of Education, to which all the Loans Payments would be made. The maximum Lending Size is the Cost of Attendance Minus any other Financial Aid the Student has received. You can use a Federal Direct PLUS Loan to cover the Total Cost of Attendance.
  4. Direct Consolidation Loan: If you have other forms of federal loans, you can consolidate them into one loan and one easy payment with a Direct Consolidation Loan. And, if your current federal loans are ineligible for PSLF, you can consolidate them with a Direct Consolidation Loan to qualify. Direct Consolidation Loans are fixed-Interest Loans with Flexible Options, based on your Ability to Repay. There is no fee to Consolidate, though you can only do it once. It could lower your monthly payments but also could extend the amount of time needed to pay off the loan.

2. Federal Perkins Loan –

Federal Perkins Loans are used for Undergraduate, Graduate, And Professional Degree Students with Financial needs. Perkins Loans have lower Interest Rates than other loans. Eligible Borrowers get Perkins Loans at 5% Interest.

These Loans are dependent according to your Financial needs and the availability of funds at your chosen university. The Perkins Loans were more desirable than Stafford Loans because they were subsidized (the government paid the interest while you were in school) and had a fixed interest rate of 5%.

Other advantages of the Perkins Loan included a longer Grace Period (nine months) before Repayment began and special loan forgiveness provisions.

Because of their favorable terms, Perkins Loans were reserved for students who show exceptional financial need. The loans were granted by a college and not all schools participated.

3. Stafford Loans-

These Loans are More common than the Perkins Loans and the money for these types of Loans comes directly from the Federal Government in the program called the Federal Direct Student Loan Program (FDSLP).

There are two types of Stafford Loans i.e. Subsidized and Unsubsidized. The type helps determine your Interest Rate and Maximum Loan Amount.

  1. Subsidized Stafford Loans:  If your loan is subsidized, you won’t be responsible for making any payments until after you graduate. Your interest rate typically should be 3.76% in a school year. The government pays your interest for you while you’re in school. Subsidized loans are reserved for students who can demonstrate financial hardship. Most go to students whose families’ annual income is less than $50,000.
  2. Unsubsidized Stafford Loans: If you have an Unsubsidized Loan, you’re Responsible for Paying off all the interest. The interest rates were fixed at 3.76% while you’re in school, but Payments are typically deferred or postponed until after you graduate. All the Students are Eligible for these Types of Student loans. Your Annual Stafford Loan Limit for Unsubsidized Loans Ranges from $5,500 to $12,500, depending upon your School Year and whether you are claimed as a dependent on someone’s Tax Return. You’re Eligible for the Larger College Loan if you’re Financially Independent. If you’re Financially Dependent but your Parents are Ineligible for Parent PLUS loans, you’re Permitted the Same Maximum College Loans as if you were Independent.

4. Private Student Loans-

These Loans are also known as Alternative College Educational Loans which are the option for both Students and Parents who still can’t meet Financial Obligations for Attending College even with money Available through Federal Loans.

Private Student Loans are More Closely Resemble Personal Loans than Student Loans and Parent Loans. You’re Eligibility and Interest Rate depends on your Credit History.

Your Interest Rate for these Loans may be Fixed or Variable and is Typically Higher than with Federally Guaranteed Education Loans but Lower than with other debts like Credit Card debt. Private Student Loans are generally Two Types:

  1. School-Channel Loans:  These Loans offer borrowers Lower Interest rates but generally take longer to process. These Loans are certified by the Schools which means the School signs off on the borrowing amount, and the Funds are disbursed directly to the School. The Certification means only that the School Confirms the Loan Funds will be used for Educational Expenses only and agrees to hold them and disburse them as needed. Certification does not mean that the school approves of, recommends, or has even examined the terms (conditions) of the Loan.
  2. Direct-To-Consumer Private Loans: are not certified by the School and Schools don’t Interact with a direct-to-consumer Private Loan at all. The student simply Supplies Enrollment Verification to the lender, and the Loan proceeds are disbursed directly to the Student. While direct-to-consumer loans generally carry higher interest rates than school-channel loans, they do allow families to get access to funds very quickly in some cases, in a matter of days. Some argue that this convenience is offset by the risk of student over-borrowing and/or use of funds for inappropriate purposes since there is no third-party certification that the amount of the loan is appropriate for the education needs of the student in question, or that it will be used only for education.

5. Health Professions Student Loans (Medical Education Loans)-

Medical Education Loans are specialized Student Loans that Exist for Students who are Studying in specific areas of Medicine such as Nursing, Sports Medicine, or Veterinary Medicine. Each Loan has its own Requirements for Accepted Areas of Study and Financial Needs.

Despite your Financial Standing or Field of Study, you can find an Education Loan that suits your Needs. It can help you and your family to fund your Higher Education and reduce the Financial burden of School or College.

Education Loan Breakdown-

Check out the below Table for a breakdown of each Type of Student Loan and Its Current Interest Rate.

Loan Need-Based? Subsidized? Sponsor Borrower Interest Rate (Loans disbursed after July 1, 2017)
Direct Subsidized Loan Yes Yes Federal government Student – Undergraduate 4.29% (fixed)
Direct Unsubsidized Loan No No Federal government Student – Undergraduate 4.29% (fixed)
Direct Unsubsidized Loan No No Federal government Student – graduate/professional 5.84% (fixed)
Perkins Yes Yes Federal government Student 5% (fixed)
Direct PLUS Loan No No Federal government Parent (or graduate/professional student) 6.84% (fixed)
State and Private Loans No No Banks, colleges, foundations, state agencies Usually students with a creditworthy cosigner Usually higher than federal rates; variable

Difference Between The Public Student Loans And Private Student Loans-

  • The Interest Rates on Federal Education Loans are Fixed. The Interest Rates on Private Student Loans can be variable or fixed and are usually higher.
  • Undergraduate borrowers who can demonstrate financial need could receive a federal subsidized loan, meaning the government pays the interest until they graduate. Private loans are never subsidized. You pay all the interest.
  • Federal loans offer flexible repayment options and loan forgiveness programs. Private loans have few repayment options and no loan forgiveness programs.
  • Federal loans don’t have to be repaid until you graduate or drop below half-time status as a student. Many private loans ask for repayment while you’re still in school.
Federal Student Loans Private Student Loans
You will not have to start repaying your federal student loans until you graduate, leave school, or change your enrollment status to less than half-time. Many private student loans require payments while you are still in school.


The interest rate is fixed and is often lower than private loans and much lower than some credit card interest rates. View the current interest rates on Federal student loans. Private student loans can have variable interest rates, some greater than 18%. A variable rate may substantially increase the total amount you repay.
Undergraduate students with financial needs will likely qualify for a subsidized loan where the government pays the interest while they are in school on at least a half-time basis. Private student loans are not subsidized. No one pays the interest on your loan but you.


You don’t need to get a credit check for most federal student loans (except for PLUS loans). Federal student loans can help you establish a good credit record. Private student loans may require an established credit record. The cost of a private student loan will depend on your credit score and other factors.
You won’t need a cosigner to get a federal student loan in most cases. You may need a cosigner.


Interest may be tax-deductible. Interest may not be tax-deductible.
Loans can be consolidated into a Direct Consolidation Loan.  Learn about your consolidation options.


Private student loans cannot be consolidated into a Direct Consolidation Loan. 
If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments. Private student loans may not offer forbearance or deferment options.
There are several repayment plans, including an option to tie your monthly payment to your income. You should check with your lender to find out about your repayment options.
There is no prepayment penalty fee. You need to make sure there are no prepayment penalty fees.
You may be eligible to have some portion of your loans forgiven if you work in public service. Learn about our loan forgiveness programs. It is unlikely that your lender will offer a loan forgiveness program.
Free help is available at 1-800-4-FED-AID and on our websites. The Consumer Financial Protection Bureau’s private student loan ombudsman may be able to assist you if you have concerns about your private student loan.

Top Federal Loan Servicers-

  • FedLoan Servicing (also known as PHEAA): This company was established to directly support the US Department of Education in the servicing of federal student loans.
  • Great Lakes: This is a Non-Profit Organization that is dedicated to helping College Students by working with both the US Department of Education and Private Lenders to make every step in the Borrowing and Repayment Process Easier.
  • Navient: One of the select groups of Companies chosen to Service Student and Parent Federal Loans by the US Department of Education. Their loan Servicing Department helps Customers through both Financial Literacy Tools and broad-based Servicing.
  • Nelnet: This Company works with the US Department of Education in assisting Borrowers through every stage of their Loan’s Life Cycle: during School, during their Grace Period, and Throughout the Education Loan Repayment.

Federal Student Loans Benefits, Types, How To Apply & Complete Guide

Student Loans in the US or Federal Student Loans are a form of Financial ads designed to help Students & Parents to get their higher education.

Federal Students Loans are different from Private Students Loans. Federal Students Loans are made by the department of education while Private Students Loans are made by banks & Financial Institutions. federal Student Loans are likely to be your best Student Loan Option.

They offer more generous borrowers protections than Private Student Loans do, such as the ability to switch to an income-driven plan if you can’t afford your monthly payment or to defer payments if you lose your Job.

Federal Student Loans are made directly from the Department of Education to Borrower. Federal Student Loans cover full academic years and are distributed in two payments, one each semester. With Federal Student Loans, School determines the type of Student Loan and how much you can borrow.

These Loans may only be used to cover Tuition and direct costs of Living expenses. all the Payments must be made either directly to the School or the Department of Education.

Federal Student Loans Benefits, Types, How To Apply & Complete Guide

The Fee Application for Federal Student Aid or FAFSA is the Application for all the Federal Student Loans. The Federal Student Loan Programs are highly regulated by the Department of Education, United States.

Also, the Interest rates and many more important Terms and Conditions are also Set by the Department of Education USA, which is similar to both FFEL and Direct Loan Programs.

Direct Loans and Federal Family Education Loans (FFEL) are two Largest Govt Education Loan Programs. Knowing and Understanding the Interest rate of your Federal Student Loans is a very Important Step in navigating the Path to Financial Success.

Eligibility for federal student loans is based on the results of your FAFSA. There are several benefits of federal student loans:

Federal Student Loans Benefits & Features-


  • Lower fixed interest rates
  • Income-sensitive repayment plans
  • Deferment periods
  • Forgiveness options
  • No credit checks are required (and loans are NOT based on creditworthiness)

Federal Student Loans Types –

Federal Student Loans are categorized into several types:

Direct subsidized loans or subsidized Stafford loans –

These types of Federal Loans are earmarked for Undergraduate borrowers with financial needs. Direct Subsidized Loans are not accrued Interest while you’re at school.

Direct Unsubsidized loans or Unsubsidized Stafford loans-

These loans are available to all eligible students (both graduates or Undergraduates Students) and are not based on financial need. You are responsible for all interest payments (or capitalization of interest) from the date the loan is disbursed.

Perkins loans –

These Type of Federal Student Loans are subsidized loans which are reserved for undergraduate and graduate borrowers with extreme financial need.

Unlike all other federal student loans, which have interest rates set by Congress each year, Perkins loans always charge 5% interest and don’t have any fees.

Grad PLUS loans –

These loans are available for graduate and professional students and don’t have borrowing limits. Unlike Stafford and Perkins loans, which don’t consider borrower credit, you need decent credit to qualify for a Grad PLUS loan.

The government wants to make sure your credit report is free of negative marks like bankruptcies, charge-offs or past-due debt, says Karen McCarthy, director of policy analysis at the National Association of Student Financial Aid Administrators.

Parent PLUS loans-

These loans are available for parents with dependent undergraduate students. Parents’ credit histories must be tarnish-free to qualify. They can borrow as much as they need to cover their student’s college costs.

Federal Student Loans Borrowing Limits-

Year in school Annual borrowing limit, subsidized loans for dependent students Annual borrowing limit, unsubsidized loan for dependent students
First-year undergraduate students $3,500 $5,500 total (including subsidized)
Second-year undergraduate students $4,500 $6,500 total (including subsidized)
Third- and fourth-year undergraduate students $5,500 $7,500 total (including subsidized)
Aggregate loan limits $23,000 $31,000 (including subsidized)
Year in school Annual borrowing limit, subsidized loans for independent students Annual borrowing limit, unsubsidized loan for independent students
First-year undergraduate students $3,500 $9,500 (including subsidized)
Second-year undergraduate students $4,500 $10,500 (including subsidized)
Third- and fourth-year students $5,500 $12,500 (including subsidized)
Aggregate loan limits $23,000 $57,500 (including subsidized)

How to Apply for Federal Student Loan Program-

Applying for federal student loans can seem like a daunting process, but it’s actually quite simple and can be done mostly online. To make it easier, we’ve outlined the step-by-step application process below:

  • Start by completing a FAFSA Form (or Renewal FAFSA for returning students). This form is required for both current and prospective US college students (both undergraduate and graduate) to determine their eligibility for financial aid. It can be completed online and submitted directly to the Department of Education for review.
  • The student will begin receiving financial aid award letters anywhere from 3 days to 6 weeks after submitting their FAFSA. Each letter will outline all of the relevant information regarding the financial aid package being offered.
  • Upon receiving these letters, the student will contact their chosen school’s financial aid office to accept the student loan package being offered.
  • Once the student loan package is accepted, the student will simply review and sign any necessary paperwork associated with the loans, such as a Master Promissory Note.

Federal Student Loans Vs Private Student Loans-

You have the option first to grab the Federal Student Loans, but Private Student Loans can be also a good option for some borrowers. Such as Student who has borrowed the maximum amount of Federal Student and Still looking for Student Loans.

Interest Rates:

Federal student loans have the benefit of a fixed interest rate and usually, have lower rates than private student loans. Private student loans can be either fixed or variable rate.

Variable rate loans are often tied directly to the Prime or LIBOR rate and adjust accordingly. The interest rates for private student loans can vary widely depending on the lender, term length, whether the loan is fixed or variable rate, and the credit history and debt-to-income ratio of the borrower or cosigner. Current rates can vary from 2.5% up to 18%!

Federal Student Loans & Privates Student Loans Benefits

Applying for Private Student Loans:

Unlike most of Federal Student Loans, Private Student Loans require the full underwriting process. Lenders look for borrowers who have good credit and enough extra cash to make loan payments given other expenses.

that is a relatively low debt-to-income ratio. If you don’t meet those requirements, you may need a co-signer to qualify for a private student loan.

Banks, credit unions and a new crop of online lenders all offer private student loans. The biggest private student lenders are Citizens Bank, Discover, Navient, PNC Bank, Sallie Mae, and Wells Fargo Student Loans, according to the latest report. Startups including SoFi, CommonBond and College Ave also offer private student loans.

Federal Student Loan Servicers –

Great Lakes Student Loans: a non-profit company is dedicated to helping college students by working with both the US Department of Education and private lenders to make every step in the borrowing and repayment process easier. for more Info about Great lakes Student Loans Click here

Nelnet: One of the select group of companies chosen to service student and parent federal loans by the US Department of Education.

Their loan servicing department helps customers through both financial literacy tools and broad-based servicing. for more Info about Nelnet Student Loans Click here

FedLoan Servicing (also known as PHEAA): This company was established to directly support the US Department of Education in the servicing of federal student loans. 

Navient: One of the select group of companies chosen to service student and parent federal loans by the US Department of Education. Their loan servicing department helps customers through both financial literacy tools and broad-based servicing.

Nelnet Student Loans Info Reviews Consolidation & Guide For Borrowers

The Nelnet also known as National Educational Loan Services is the Student Loan Servicer Headquartered in Lincoln, Nebraska with the mission of “Build a more educated and fiscally responsible world.”

Nelnet is one of the topmost Loan servicers for Federal Students working since 1978. According to the Latest Report, Nelnet is contracted with the Federal Government to manage $147 billion in Federal Student Loans for 5.8 Million borrowers.

After the major Student Loan Services Great LakesWells Fargo student loans, Nelnet is the best Student Loan Servicer. Nelnet act as a loan management service for Loan Issued under the Federal Direct Student Loan Program as well as for many Private Lenders and Alternative Student Loans.

If you have Nelnet Student Loan, they will work with you as a Student Borrower in every stage of your Loan Cycle, while you’re in school, during your grace period, and as you repay your Loan.

As a Student Loan Servicer Nelnet Provides Support and Customer Services if you’ve any issues during Netnet Student Loan repayment. through Loan Experience providing loan management services for students, Nelnet has seen firsthand the effect Student debt can have on a recent graduate.

Most students will graduate college with multiple outstanding education loans, and when the time comes to repay those loans many students will find it difficult to cope with the financial burden.

That’s why one of Nelnet’s flagship services is the Consolidation Loan. With Nelnet’s help, students can consolidate their multiple education loans into a single, more manageable, loan package.

Nelnet Student Loan

Nelnet Student Loans are one of many kinds of Private Student Loans. Just Like other private College Loans, the terms and conditions to Apply for Nelnet Student Loans are quite easy. Nelnet Student Loans have low-Interest Rates that make them a suitable option for students who lack the Funds to pay for College on their own.

If you want to Apply for Nelnet Student Loans, then Borrowers, as well as Co-Borrowers, should have at least 18 Years of Age. the Applicants must be the only Citizen of the United States. also, They should be enrolled in Eligible Schools and have had no bankruptcies for the previous 7 years.

Also, applicants should not have any history of default on any type of student loan. Nelnet loans allow a student to get money for college on easy terms and conditions. Borrowers can enjoy the great online facilities that are offered by Nelnet in order to facilitate its customers in the best possible manner.

Having a co-borrower in these loans also allows students to save their funds. Also, the loan consolidation program by this financial aid firm allows students to repay their college loans in a much easier way than they can without these programs. As a loan servicer, Nelnet can:

  • Manage your student loan Payments
  • Help you lower your payments by changing your repayment plan (such as from Standard Repayment Plan to an Income-Based Repayment plan)
  • Work with you to apply for deferment or forbearance, which postpones your student loan Payments
  • Offer resources for getting financially fit

Nelnet Student Loans Services Consolidation-


The Term Loan Consolidation is somewhat misleading. When Student Consolidates their outstanding Education Loans, their Lenders, in that case, the Federal Govt agrees to Pay off the Student’s Loan including all Applicable fees,  penalties, and accrued interest.

The lender then writes a new loan agreement for the student borrower, covering the total cost of the loans that have been discharged. This new loan typically has a longer life than the student’s original loans, and provides the borrower with lower, more easily managed monthly payments.

There are two approaches to consolidating your federal student loans. the first one is to consolidate your federal loans with the federal government. the Second is to consolidate your federal loans with a private company.  Picking the wrong approach can be a huge mistake, so it is critical you understand your choices.


  • Fourth-largest servicer of federal loans as of December 2015.
  • Phone number: 888-486-4722, staffed 24/7, excluding U.S. holidays.
  • You can also contact Nelnet on its website, Facebook and Twitter.

Making Nelnet Student Loan Payment-

In order to make and keep track of your Student Loan Payments first, you need to Register on Nelnet’s Website. You’ll start Creating a Username and Password as well as Entering your Social Security Number, Date of Birth, and other Personal Details in order to retrieve your Loans.

Once you are Logged In to the Nelnet Website for Auto Debit which deducts your required monthly payment from your bank account. That also gets you a 0.25% interest rate discount on eligible loans.

It’s crucial to have enough money in your account to cover your payment when you use auto debit; otherwise, you could rack up overdraft fees.

Also, Nelnet has a mobile app within which you can check your Nelnet Student loan balance and read messages from the company. You can also create text alerts, under “Settings” when you’re logged in, to get an update if your account is past due.

You have the option to make payments by mail which will be applied within five business days once Nelnet receives them. To Make a Payment Online Just follow these steps:

  • Log in to your Nelnet.com account.
  • Click Make a Payment.
  • Enter the desired payment amount in the Payment Amount field
    1. If you wish to direct your one-time payment (including partial payments) to specific loan groups, select Pay by Group and enter the amounts in the fields corresponding to the loan groups in which you would like the payment directed.
    2. You have the option to request one-time online payments and not advance your due date of more than one month.
  • Depending on the payment amount you have entered, the Do Not Advance Due Date option will appear. By selecting this option, your due date will only advance a single month, even though you have paid more than the current amount due.
  • Enter or select the desired Payment Date
  • Enter your checking or savings account information and click Proceed to Confirmation
  • On the Review page, verify that the information displayed is correct
  • Read the payment authorization at the bottom of the page, and select Pay Now to submit your payment

Nelnet Student Loan Application –

Nelnet is one of the biggest federal loan servicers.  If you are unsure if your Nelnet loans are federal loans, you can always visit the National Student Loan Database.

There you will find the federal government’s database that shows who services your federal loans.  If you see your Nelnet loans on the list, you can be certain they are federal. You can Apply Nelnet Student Loan Online through its official website.

Your Nelnet.com account is a secure section of the Nelnet website where you can view your account and loan details, make a payment, request to lower or postpone your payments, sign up for auto debit, and more.

To access your account, log in with your username and password. If you haven’t created your online account, you can do so from the Register button on Nelnet.com.

The complete step-by-step process is given below for Register & Login the Nelnet Student Loan:

Nelnet Student Loan Login Process-

Enter the username and password you selected when you registered. If you have not selected a username or password, register on the site.

How Do I Register for a Nelnet.com account?

  1. Visit Nelnet.com and click Register.
  2. To create your account, enter your Social Security number, date of birth, and email address.
  3. Create a username and password based on the rules specified on the page. Re-type your password and click Continue.
  4. Select one image from the displayed images to help you recognize that you are logging in to a secure Nelnet website, and Continue.
  5. Verify that your contact information is correct (update as needed).
  6. Review the terms and conditions.
  7. If you agree with the terms and conditions, select the checkbox stating “By checking this box, you accept these terms & conditions and consent to receive communications to your mobile device” and click Continue.

Things to Remember:

Username Requirements:

  • 6 – 20 characters
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  • 8–15 characters
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Nelnet Student Loans Contact Information-

Nelnet makes it easy to stay in contact:

You can call them 24/7 — If you have any questions, give ‘em a ring:

U.S.: 888.486.4722

International: 303.696.3625

You can also send them an email using this form.

For general correspondence, you can send letters to Nelnet here:

P.O. Box 82561
Lincoln, NE 68501-2561

Fax: 877.402.5816

If you are sending documents related to changing your payment plan, use this address:

Attn: Enrollment Processing
P.O. Box 82565
Lincoln, NE 68501-2565

Fax: 866.545.9196

Last, but not least, you can also follow them on social media on TwitterFacebook, and LinkedIn.

Remember, your loan servicer is your friend (or, at least, they want to be), so if you are struggling to make payments or need clarification on how your payments are being distributed, use this Nelnet contact information to get in touch.

Frequently Asked Questions (FAQ)-

#1. What is the difference between the Federal Family Education Loan Program (FFELP) and the Federal Direct Loan Program (FDLP)?

Generally, loans made under both programs have the same terms and conditions. Some differences include repayment plans, borrower benefits (for example, an interest rate reduction for making on-time payments), loan forgiveness programs, and interest rates. The primary difference between the two loan programs is that the Department of Education originates loans under the FDLP and private lending institutions originated loans under the FFELP

#2. How long do I get to repay my loan(s)?

Generally, Stafford and PLUS loans must be repaid within 10 years from the start of repayment. However, any periods when you postponed your payments due to deferment or forbearance, and any time while you were in school or a grace period (when payments aren’t due) will not count toward the 10-year repayment term. You may extend the repayment term if you qualify for the Extended Repayment Plan, Income-Based Repayment Plan, Income-Contingent Repayment Plan, Pay As You Earn, or Revised Pay As You Earn Repayment Plan. On a consolidation loan, the repayment period may extend up to 30 years depending on the initial balance of the loan. Please review your Payment Schedule for information on the term of your loan.

#3. How do I know when I have a payment due?

Nelnet sends billing statements (either electronically or via paper, based on your selection in your Nelnet.com account) about three weeks before payments are due. You can always log in to your Nelnet.com account to verify upcoming due dates and payment amounts for all of your loans with Nelnet. No payments are due while you are in school or if your loans are in grace, deferment, or forbearance, so you will not receive a statement if your student loans are in one of these statuses.

#4. What if I can’t afford to pay my regular monthly payment?

If you are having trouble making your payments, log in to your Nelnet.com account and select Repayment Plans or contact us. You may be eligible for other repayment plans, some with payments as low as $0. A different repayment plan may make managing your monthly budget easier. Those repayment plans include Graduated, Income-Sensitive, Income-Based, Income-Contingent, Pay As You Earn, Revised Pay As You Earn, and Extended repayment plans. Nelnet offers multiple ways to lower or postpone payments, so if you have any trouble making your payments, even if you are already behind on payments, remember that we’re here to help you find a solution that will work for you. Call us at 888.486.4722 to get started.

#5. What if I’m behind on making payments (my loans are delinquent) at the time I am making a request for a new repayment plan?

To bring your account up to date and change your repayment plan, you may make the payments that are needed to bring your loan up to date. If you are unable to make these payments, Nelnet may be able to grant you a forbearance on your loans to cover the time you were behind on making payments. If you are having trouble making your monthly payment, log in to your Nelnet.com account and select Repayment Options to explore your options.

#6. How can I change my repayment plan?

You may change your repayment option to another whenever you want. Please note, however, that the availability of some repayment plans may vary, depending on your outstanding loan balance, interest rate, and repayment term remaining. You may prepay your loan at any time without penalty, regardless of the repayment plan. To learn more about the various repayment plans that may be available, log in to your Nelnet.com account and click on Lower My Payments on the left.

#7. How do I know which repayment plan I am eligible for?

To know which plan(s) you may be eligible for, log in to your Nelnet.com account and click on Lower My Payments to determine the repayment option(s) for which you qualify.

#8. How do I know if my repayment plan request was approved?

You will receive a notification via mail or email based on your selected preference at Nelnet.com.

#9. Will the total amount I have to repay stay the same if I change repayment plans?

No. Choosing a different repayment plan will change the amount of your monthly payment. The amount you repay each month will determine the total interest that accrues on your loan, and therefore, how quickly you repay your obligation. For example, if you lower your monthly payment by choosing a repayment plan that offers a longer term, the amount of interest you’ll pay over time, as well as the total amount you pay back over the life of the loan, will increase.

#10. Will switching repayment plans or postponing my payments using a deferment or forbearance hurt my credit history?

No. The type of repayment plan used to repay a student loan is not reported to the credit bureaus. Using a deferment or forbearance for your student loans will not adversely affect your credit history. Making a late payment or not making a payment at all could impact your credit history, so let us know immediately if you will have trouble making payments—we can help!

#11. Are there any fees for changing my repayment plan?

No. There is no charge for changing your repayment plan. Please note that if your loans are on the Income-Based Repayment (IBR) Plan and you wish to change to a different repayment plan, federal regulations require you to make one scheduled payment on the Standard Repayment Plan or in a Reduced Payment Forbearance after exiting IBR before you may change plans. If you have Family Federal Education Loan Program (FFELP) student loans and choose to exit the IBR Plan, federal regulations require that your student loans be placed on a 10-year Standard Repayment Plan or Reduced Payment Forbearance. Any unpaid interest that accrued while you were on the IBR Plan would be added to your principal balance (this process is called capitalization) when you exit the IBR Plan. For more information about interest capitalization and its effect on your loan balance, click here.

#12. What is the process for applying for an income-driven repayment plan (Income-Based, Income-Contingent, or Pay As You Earn Repayment)?

When you apply online for an income-driven repayment plan (Lower My Payments link on the left), you will be directed to log in to StudentLoans.gov through which you can submit your application to us. Through the online application, you will have the option to securely transfer your Adjusted Gross Income from your federal tax information to your online application using the IRS Data Retrieval Tool. Please note that if you elect to send alternative documentation of your income, or indicate on your application that the adjusted gross income from your tax return does not reflect your current income, you will need to send supporting income documentation to the address or fax number below before your repayment plan request can be fully reviewed and processed.

P.O. Box 82565
Lincoln, NE 68501-2565
Fax: 866.545.9196