Home Save Homepage

Federal Student Loans vs. Private Student Loans

If you have reached the point in your education where you have exhausted scholarships, grants and your parents it may be time to look in a student loan. Now, the question is, should you try for a Federal student loan or use a private lender? Let’s look at both.

Federal student loans should always be your first option as they offer more benefits including, easier credit requirements, option to postpone payments, longer repayment terms and lower interest rates. Some of these loans are needs based while others are not. The Federal Perkins Loan and the Federal Stafford loan have different eligibility requirements. The Federal Stafford loan amount is based on the student’s year in school and financial situation and will be processed by your colleges financial aid office. The Federal Perkins loan is for students with exceptional financial need, low interest and can be as high as $4,000.00 for undergraduate students and up to $6,0000.00 for graduate students. If you fail to meet the eligibility for these loans you can turn to the private sector but there are some disadvantages. Private loans may not offer deferment options and the credit requirements are more strict so you may need a co-signer. Also, your credit situation will affect the interest rate and fees. There is also a Federal loan program for parents called the PLUS Loan. Your parents may borrow a year’s worth of tuition and costs minus any other grants or scholarship received.

Employment, Loans, and Finance

Student loans, credit and budget

Scholarships and education finance

» How to Finance an Education | Student Loans & Scholarships | How to Search for Scholarships | Students and Financial Aid

Internship

Employment

» Student Employment | Working Abroad | The Benefits of Working Abroad |Popular Jobs for Students | Student Work Exchange

Other

Insurance for students