What Is a US Student Loan?
A US Student Loan is designed to help students fund tuition, accommodation, and living expenses for studies in the United States. Loans are available as federal student loans, private loans, or institutional loans with varying interest rates and repayment options.
Key Features of US Student Loans
- Federal loans for undergraduates and postgraduates
- Income-based repayment options
- Low or fixed interest rates for federal loans
- Private loans offer additional funding options
- Loans cover tuition, living costs, books, and equipment
Interest Rates 2026
| Loan Type |
Interest Rate (p.a.) |
Loan Amount |
Repayment |
| Federal Direct Subsidized Loan |
5.5% |
Up to $5,500/year |
Repayment starts 6 months after graduation |
| Federal Direct Unsubsidized Loan |
6% |
Up to $20,500/year |
Repayment starts 6 months after graduation |
| Federal PLUS Loan |
7% |
Full tuition minus other aid |
Repayment starts immediately or deferred |
| Private Student Loans |
6% – 14% |
Varies by lender |
Repayment depends on lender |
Eligibility Criteria
- US citizen, permanent resident, or eligible non-citizen
- Accepted in a recognized US university
- Undergraduate or postgraduate student status
- Maintain satisfactory academic progress
- Provide valid KYC and financial documents
Documents Required
- Proof of identity (Passport / US ID / Visa)
- University acceptance letter
- Bank account for loan disbursal
- Income details (for parents or co-signers)
- FAFSA form for federal loans
US Student Loan Example
If a student borrows $30,000 for tuition at 6% interest for 10 years:
- Monthly EMI: $333 approx.
- Total interest payable: $9,960 approx.
- Total repayment amount: $39,960 approx.
Advantages and Disadvantages
Advantages
- Access to higher education funding
- Flexible income-based repayment for federal loans
- Low interest for subsidized loans
- Private loans supplement funding if needed
Disadvantages
- Private loans may have high interest rates
- Repayment starts after graduation, reducing take-home income
- Loan default can impact credit score
How to Apply for a US Student Loan in 2026
- Submit FAFSA for federal loans
- Provide KYC and financial documents
- Apply for private loans if extra funding required
- Disbursement is made to university or student account
- Plan repayment based on projected post-graduation income
Frequently Asked Questions (FAQs)
Can international students apply?
International students may access private loans with a US co-signer; federal loans are generally not available.
When does repayment start?
Repayment starts 6 months after graduation for federal loans, unless deferred or income-based plan applies.
Are interest subsidies available?
Yes, federal subsidized loans do not accrue interest while studying.
Can loans be forgiven?
Some federal loans may qualify for forgiveness programs after meeting conditions.
Author: All Finance Store US Student Loan Team
Expertise: US Higher Education & Student Finance
Last Updated: January 2026
Disclaimer: This page is for informational purposes only. US student loan terms, interest rates, and eligibility vary by type of loan and lender. Verify details with official government and university sources before applying.