Since many students begin college before they have made arrangements to pay for every expense they will incur while getting an education, they often have to get grants and loans in order to pay for necessaries like tuition and rooming. Many students take out one, two, or three federal student loans so that they can afford to pay for such expenses.

Federal student loans are good for students because the interest rates that they are charged tend to be quite low. This is because the fixed interest rate is established by the government, who also guarantees the loan, despite the fact that private lenders tend to care for the details of taking out the loan.

Many students who would not be able to get a loan from most traditional lending agencies are able to do so by means of a federal student loan, which makes them quite attractive, as do the government's guarantee and low interest rate.

A grace period of six months is often given to individuals right after they graduate from college during which they do not have to make any payments on their student loans. The government actually pays the interest on subsidized loans during this time period.

If the person who has taken out a federal student loan chooses to pay during the initial six month period, the money they pay will be taken off of the loan's principal. Loans that are not subsidized will incur interest during the first six months even if the student makes no payments. Those charges will then be added to the principal. Regardless of whether or not the loan is subsidized, you will have to start paying the principal and the interest on your student loan when those first six months are up.

Federal Student Loans: Portions Can Be Forgiven

The government is all about helping recent college grads with their federal student loan and there are numerous ways in which a portion of the loans can be forgiven. By volunteering with some organization such as the Peace Corps or VISTA can erase part of the loan balance for every year the graduate volunteers with any of the agencies.

There are also some programs aimed at new teachers that teach in certain locations where a portion of the federal student loan is forgiven based on the time they serve in those schools. For most, a five year stint at one of the schools can erase about 85 percent of the federal student loan debt.