What is the Difference between Getting a Federal Student Loan and a Private Student Loan?
Page 2

A federal student loan is a specific type of loan that is aided to the student from the federal government; this allows the student to loan what the student needs financially. There is no need to pay the money back until the student has graduated from college or has otherwise decided to stop attending school. This loan can be used for books, transportation, moving costs, or a variety of other scholastic needs. When applying for this loan the student may even find out they are eligible for grants that they were previously unaware of.

There are a variety of different lenders that are going to try provide a loan. This is done to make money off interest and fees. It is the student's job is to weed out bad loans and find federal student loan providers that do not charge outrageous interest rates. Federal student loans are typically the smaller loan amounts given to and they generally have a more relaxed repayment plan.

A private student loan is a much more popular loan because these loan out much higher lump sums. This loan is given to the student if they qualify after applying (to the lender of their choice). The money requested is normally given to undergraduates in a large check but tend to contain hidden charges and exorbitant fees to pay back. Generally, 3% to 4% in fees is the same as 1% interest rate. A private student loan is more difficult to get and has more complex repayment terms. The only reason a student should try for a private student loan is if they have maxed out the federal student loan amount and have no other alternatives.

With understanding the difference between a federal and private student loan, students can better prepare themselves for the eventual repayment terms ahead of time and fully concentrate on their college experience.


What is the Difference between Getting a Federal Student Loan and a Private Student Loan?
  Back to Page 1

About The Author The author edits a site featuring Grants for Education and another Government Grants site providing info on every grant the federal government offers. Michael Saunders has an MBA from the Stanford Graduate School of Business.

Additional Resources

category - Education Grants

Ethical Schools Project in Peru
The Ethical Schools Project revolves around the notion of promoting a culture of ethical behavior and civic responsibility among members of the youth, as well as teachers and parents. The project also aims to explore ways that would contribute to a reduction in corruption and other forms of illicit activities such as cocoa cultivation and illegal environmental degradation, which are both common practices in Peru.

---

Museum Grants for African American History and Culture Program
The Institute of Museum and Library Services has established a funding opportunity to support the Museum Grants for African American History and Culture Program wherein they intend to provide the African American museum staff with added knowledge and ability in all the areas of management, operations, programming, collections care, and other museum skills.

---

What Are Title IV Programs and How Can They Help You Pay for College
The Title IV programs help college students save money and protects their rights, is a service provided by the government that is responsible for higher education to help prepare undergrads for the real job market after they graduate.

---

Summer Seminars and Institutes Program
The National Endowment for the Humanities has recently established the Summer Seminars and Institutes Program wherein it aims to provide support to faculty development programs in the field of the humanities for school, college, and university teachers.

---