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Federal loans to students
The very first category are loans made directly to the student themselves. The loans are available to college and university students used to supplement personal and family resources, scholarships, grants. They may be subsidized by the U.S. Government or may be unsubsidized depending on the student's financial need.

Subsidized and Unsubsidized loans
Both subsidized and unsubsidized loans are guaranteed by the U.S. Department of Education either directly or through guarantee agencies. All students are eligible to receive them regardless of credit score or other financial issues. Both loans offer a grace period of six months, so no payments are due until six months after graduation or after the borrower did not graduate.

Both types have a fairly modest annual limit. The limit effective for loans disbursed on or after July 1, 2007 is as follows: is $3,500 per year for freshman undergraduate students, $4,500 for sophomore undergraduates, and $5,500 per year for junior and senior undergraduate students, as well as students enrolled in teacher certification or preparatory coursework for graduate programs.

Subsidized federal student loans
Subsidized federal student loans are offered to students. Financial need may vary from school to school. The federal government makes interest payments while the student is in college.

Unsubsidized federal student loans
Unsubsidized federal student loans are also guaranteed by the U.S. Government, but the government does not pay interest for the student, rather the interest accrues during college. Those who borrow $10,000 during college will owe $10,000 plus interest upon graduation. The interest will be "capitalized" into the loan amount, and the borrower will begin making payments on the accumulated total. Students can choose to pay the interest while still in college.

Private Student Loan
A private student loan is a financing option for higher education in the United States that can either supplement or replace federally guaranteed loans such as Stafford loans, Perkins loans and PLUS loans. These are unsecured loans with various options for repayment and may offer forbearance and deferral options.

Most private loan programs are tied to one or more financial indices such as the Wall Street Journal Prime Rate or the BBA LIBOR rate plus an overhead charge. This type loan invariably has a one time origination fee which depends upon the loan amount.

Parents loaning
Parents have an option of borrowing money to cover the educational expenses of higher education. This type of loan is called Parent Loan of Undergraduate Student. In this type of loan, no grace period is provided and payments start as soon as the loan is disbursed.