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Federal Versus Private Student Loans


Students who are eligible for federal loan assistance are strongly encouraged to learn about the Federal Direct Loan programs before applying for a private educational loan. Federal loans generally have better benefits, more flexible repayment options (including income-driven plans), and fixed interest rates.


Interest rates for private loans may be fixed or variable, can change quarterly, and are set by each lender based upon their established parameters. Approval ratings for private loans also vary from lender to lender. Some students may be required to apply with a creditworthy cosigner.

See the Federal Student Aid website for information that will assist you in comparing federal and private student loans.