The two most common government-sponsored education (FFELP) loans are Stafford loans and PLUS loans. Stafford loans are given to students. The interest rate for Stafford loans is capped at 8.25 percent. There are strict limits on amounts that can be borrowed through this program-- loans are limited to $2,625 the first year, $3,500 the second year, and $5,500 the third and fourth years (and fifth year if necessary). Graduate student borrowing levels are set at $8,500 per year. Repayment of Stafford loans begins six months after students complete school. PLUS loans, on the other hand, are given to parents. There is no limit to PLUS borrowing, but repayment begins immediately after the loan is taken out. There is some debate over whether students or parents should shoulder the loan burden for educational loans. There are advantages and disadvantages either way, so you should talk to a financial advisor to find out the best formula for your family.