Federal and private student loans can both help pay for education, but they work differently. Federal student loans are provided through the federal student-aid system and generally come with standardized terms, protections, and repayment options established under federal rules.
Private student loans are offered by banks, credit unions, and other private lenders. Their interest rates, eligibility requirements, repayment options, and borrower protections can vary considerably between lenders. Your credit history and income may also play a larger role in determining the terms you receive, and some students may need a cosigner.
Federal loans are often worth exploring first for eligible students because of their available protections and repayment features. Private loans can sometimes help cover remaining education costs after other funding sources have been considered.
Before choosing either option, compare the interest rate, fees, repayment terms, and available protections. Our guide to federal vs. private student loans explains the key differences.
