Federal Loan Programs

U.S. Department of Education has two federal student loan programs: the Federal Perkins Loan Program and the William D. Ford Direct Loan Program. As with any type of loans, these loans must be repaid.

Federal Perkins Loan Program

This school-based loan program is offered at participating schools to full-time or part-time students who demonstrate financial need. Repayments are made directly to your school.

Federal Direct Loan Program

This is the largest student loan program, and you must be enrolled as at least a half-time student to be eligible for a loan. There are four types of federal direct loans available, including:

  • Direct Subsidized Loans – made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school
  • Direct Unsubsidized Loans – made to eligible undergraduate and graduate students, but in this case, the student does not have to demonstrate financial need to be eligible for the loan
  • Direct PLUS Loans – made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid
  • Direct Consolidation Loans – allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer

For eligible military borrowers, no interest accrues (for a period of no more than 60 months) on Direct Loans first disbursed on or after Oct. 1, 2008, while serving on active duty or performing qualifying National Guard duty during a war or other military operation or other emergency, and serving in an area of hostilities qualifying for special pay. You also may qualify for deferment of repayment on your loans while serving on active duty in the military.

Loan Forgiveness

Several loan forgiveness programs allow a portion of a student loan to be "forgiven" for students who commit to work in the public interest or in areas of special need. The forgiven portion of a loan does not have to be repaid as long as terms of the agreement are met. Loan forgiveness programs in Tennessee include:

  • Tennessee Rural Health Loan Forgiveness Programs
  • Tennessee Math & Science Teacher Loan Forgiveness Programs

Read more information about loan forgiveness here.