The most common student loan is the Federal Stafford Loan. This loan may be subsidized or unsubsidized. If the student has demonstrated need, the loan can be subsidized (government pays the interest while the student is in school). If the student does not have need, then the interest will be charged from the time the loan is disbursed until it is paid in full. The maximum a dependent student can receive is related to the year in school. First-year students receive up to $2,625, 2nd year up to $3,500, 3rd and 4th years up to $5,500 and graduate students can receive up to $8,500. Some schools offer Federal Direct Loans. The Direct Loan and the Stafford Loan programs differ in who lends the money. Under the Direct Loan Program, the federal government makes loans directly to students and parents through the school's financial aid office. Under the Stafford Program, private lenders such as banks and credit unions make the loans. The interest rate on the student loans cannot exceed 8.25% with a 4% fee that is deducted proportionately from each disbursement of your loan.