Federal student loans are lending instruments that are backed by the U.S. government to help citizens pay for college and other types of higher education. This type of lending instrument delivers several benefits over other borrowing options, but should only be considered after other sources of funding are exhausted. Federal student loans are generally favored over private loans because the interest rates tend to be lower. Plus, this type of loan also tends to have deferred repayment options and the ability to put repayment into forbearance even after it has started. Still, it is best to only seek out loans after private pay, scholarship and grant possibilities have been exhausted.