<P> Student loans come in several varieties in the United States, but are basically split into federal loans and private student loans . The federal loans, for which the FAFSA is the application, are subdivided into subsidized (the government pays the interest while the student is studying at least half - time) and unsubsidized . Federal student loans are subsidized at the undergraduate level only . A subsidized loan is by far the best kind of loan, but an unsubsidized federal student loan is far better than a private student loan . Some states have their own loan programs, as do some colleges . In almost all cases, these student loans have better conditions--sometimes much better--than the heavily advertised and expensive private student loans . </P> <P> Student loans may be used for any college - related expenses, including tuition, room and board, books, computers, and transportation expenses . </P> <P> An unusual provision in the law prohibits student loans from being discharged through bankruptcy . </P> <P> The main types of student loans in the United States are the following: </P>

When did the federal government take over student loans