Getting a Federal Student Loan

Getting a Federal Student Loan Text-only

1: Student fills out a Free Application for Federal Student Aid (FAFSA®) at 

2: U.S. Department of Education sends a Student Aid Report (SAR) to the student and student’s selected colleges. 

The SAR includes your FAFSA answers and basic eligibility information. 

3: Once student is admitted to the college, the college reviews the SAR to determine the student’s eligibility for financial aid and sends the student an aid offer. 

4: Student chooses a college and decides which financial aid to accept. 

5: If student accepts a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a Direct PLUS Loan, college notifies U.S. Department of Education and requires first-time borrowers to sign promissory note and complete loan entrance counseling. 

Loan entrance counseling helps you understand your obligation to repay your loan. 

6: Student must sign promissory note and complete loan entrance counseling. 

A promissory note is a legal document in which you promise to repay your loan. It also explains the terms and conditions of your loan. 

7: U.S. Department of Education provides loan funds to the college. 

8: College applies loan funds to the student’s account and provides any remaining balance to the student. 

9: U.S. Department of Education assigns student’s loan to a loan servicer. 

A loan servicer is a company that collects payments on the loan, answers questions, and performs other administrative tasks associated with the loan. 

10: When the student graduates, leaves school, or drops below half-time enrollment, student must complete loan exit counseling. 

Loan exit counseling explains your loan repayment responsibilities and when repayment begins. 

11: After a grace or deferment period, student begins repaying the loan. If student has any questions or needs help with loan repayment, student contacts loan servicer. 

The process for receiving some federal student loans, including Federal Perkins Loans and Direct PLUS Loans for parents, is different. To learn more about these and other federal student loans, visit To get information on loan repayment, visit 

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