Private Loans
Private loans can assist students with meeting college expenses. A private loan may bridge the gap between the cost of the tuition and the federal financial aid. Just like with Federal Direct Loans, private loans must be repaid so it is important to understand your options and responsibilities. It is wise to shop around for different lenders and products to find the loan option that best suits your needs.
Students considering private loans may qualify for loans or other assistance under Title IV (federal financial aid). The terms and conditions of these loans may be more favorable than the provisions of private education loans. For more information on Federal financial aid programs, please visit http://studentaid.ed.gov
WHAT ARE THE DIFFERENCES BETWEEN FEDERAL AND PRIVATE STUDENT LOANS?
Federal student loans are made by the government, with terms and conditions that are set by law, and include many benefits (such as fixed interest rates and income-driven repayment plans) not typically offered with private loans.
In contrast, private loans are made by private organizations such banks, credit unions, and state-based or state-affiliated organizations, and have terms and conditions that are set by the lender. Private student loans are generally more expensive than federal student loans.
Federal student loans and federal parent loans: These loans are funded by the federal government.
Private student loans: These loans are nonfederal loans, made by alender such as a bank, credit union, state agency, or a school.
A chart that provides a summary of the differences between federal and private student loans can be found here.
After determining whether you qualify for government-sponsored student loans, some students consider credit-based loans to help pay direct and indirect college expenses.
You and your family apply for the credit-based loans directly with lenders. Applicants must meet credit and other eligibility requirements set by individual lenders. Before taking out any credit-based loan, we urge you and your family to compare information and terms carefully.
