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

American Schools and Hospitals Abroad Program
Much of the international aid provided by the United States government goes to support education and healthcare efforts around the world. Many of these programs are design to encourage the spread of American values to other countries.

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National Institutes of Health: Expanding the Encyclopedia of DNA Elements in Human and Model Organisms
The National Institutes of Health, in cooperation with the National Human Genome Research Institute, has established a funding opportunity to support the Expanding the Encyclopedia of DNA Elements in Human and Model Organisms project.

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2012 University Center Economic Development Program Competition
The Economic Development Administration has recently established the 2012 University Center Economic Development Program Competition wherein they intend to solicit grant applications from higher education institutions stating their intent to establish and operate special University Centers that are focused on leveraging university assets in order to create regional economic ecosystems that will support high-growth entrepreneurship.

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SMART Grants - Educational Grants for the Student of Math, Science and Languages
National Science and Mathematics Access to Retain Talent (SMART) Grants assist those undergraduate postsecondary students that major in foreign languages or certain designated technical fields. Financial grant assistance is provided on need-basis to help these students meet their educational expenses.

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