Three types of federally sponsored loans are available to help students and parents pay for college. For the Class of 2020, average debt levels varied by state, from a low of $18,350 to a high of $39,950 . Source: The Institute for College Access & Success, 2021 College Loans A fixed, low-interest federal loan available to undergraduate and graduate students who demonstrate the greatest financial need. The school is the official lender, but not all schools participate in the Perkins program. While the student is in school, interest does not accrue and no loan payments are due. Repayment with interest generally begins nine months after the student leaves school. Another type of low-interest federal loan available to under graduate and graduate students. Direct Subsidized Loans (for undergraduates only) are based on need, and the government pays the annual interest while the student is in school. Direct Unsubsidized Loans are not based on financial need, and interest accrues while the student is in school. Repayments for Direct Loans are delayed until six months after the student leaves school. Available to parents of dependent undergraduate students (as well as to graduate students). The government is the lender, but the interest rate is somewhat higher than Perkins or Direct Loans. Parents can borrow up to the total cost of attendance minus any other aid received. Repayments and interest accrual begin after loan funds are fully disbursed, but parents may request a deferral of payments while the student is in school. Federal Perkins Loan Direct Loan Direct Plus Loan 1 2 3 Private student loans are also available, but they usually carry significantly higher interest rates and have less flexible repayment options than federal loans.