Federal vs. Private Student Loans

A common question we're asked is, "Should I use federal or private student loans to pay for school?" Our response is: Always get federal student loans first, and find private student loans to fill any remaining gaps in funding. So, what else should you know about these loan types?

• Federal Student Loans -These loans carry fixed interest rates and so usually have a lower total cost than private loans with variable rates. If you need to take out student loans to pay for school, start with federal loans first.
  • Note - To get access to federal loans, you must complete the FAFSA, or Free Application for Federal Student Aid.
• Private Student Loans - After you have exhausted your federal loan options, consider private loans as an alternative funding source. It's important to compare private student loans when shopping to find the best match for your needs.
  • Note - You can use SimpleTuition's student loan comparison tool to Find Student Loans

How can I find these different loans?

• Federal Student Loans - You will receive your loans through your college, as part of the Direct Loan Program
• Private Student Loans - Comparing private student loans is the best way to find the right student loan for you. You should compare across variables that matter, such as: APR, Total Cost, Monthly Payments, etc.
• As noted above, use SimpleTuition's student loan comparison tool to find the best student loan for you.

Tagged: Federal Loans, Free Application for Federal Student Aid (FAFSA), Private Loans