Each year you fill out a FAFSA through the US Department of Education (
www.fafsa.gov). They determine your Expected Family Contribution (EFC). You release this information to the school you plan on attending, and if you are looking for institutional aid in addition to federal funds, you have to furnish your parents' personal income information (think of submitting your parents' tax returns for the previous year). This is the case regardless of if you are 22 and still live at home, or 42 and independent.
Graduate/professional loans are offered directly (Direct Stafford Unsubsidized), and I think the cap is $20,500 per year. I'm not sure about the aggregate (lifetime) limit. The different between the direct loans and the cost of attendance is usually covered by Grad Plus loans, which are also federal, and are at a slightly higher interest rate than the direct loans.
Schools DO offer merit-based or need-based financial aid, but like I previously mentioned, you have to supply your parents' personal income information to be eligible for it.
The loans are disbursed each semester/quarter each year, with the school taking tuition & fees out and issuing a refund, typically by direct deposit or a debit card, depending on what you signed up for, and like I said this is done every year. It would probably be a nightmare for most people to budget a huge amount of money for four years, so it's probably for the best that you have to do it each year.