Federal student loans are administered and disbursed through two different programs. The (1) Federal Family Education Loan Program, or FFELP, uses a network of commercial lenders to provide loans to students. If your school participates in this program, your award letter will contain a list of approved lenders that your school suggests you use to provide your loan. If your school participates in the (2) Ford Direct Lending Program (FDLP), your lender is the federal government itself. Either way, you'll be getting a "government backed" loan to help you pay for school.
Federal loans can either be subsidized or unsubsidized. If you have a subsidized loan, the government picks up the tab for your interest while you are in school. If your loan is unsubsidized, you pay the interest yourself. Subsidized loans are generally given to students with greater demonstrated need. 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. 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.