The type of loan you choose depends on your eligibility requirements, your credit history and the amount you need.  To help you decide whether a federal loan or a private loan is right for you, below is a loan comparison chart.

Federal Student Loan

Private Student Loan


  • Must complete FAFSA
  • Be a U.S. citizen or an eligible non-citizen with a valid social security number
  • Be working toward a degree or certificate in an eligible program
  • Have a high school diploma, GED or pass an approved ability-to-benefit (ABT) test
  • Register with the Selective Service if you're a male between 18 and 25
  • Maintain good grades
  • Must be 18 years or older
  • Attending at least half-time in a degree, graduate, or certificate program to be eligible for a Private Student Loan
  • Satisfactory credit history and minimum income required for approval (Many first-time students may need a qualified co-signer in order to qualify for the loan)


  • You don’t need to get a credit check.
  • Federal loans can help establish a good credit record.
  • You don’t need a credit-worthy cosigner.
  • Disbursements are made directly to your school and applied to your tuition and other direct costs.
  • Offers a low interest rate
  • The government pays interest on the subsidized loan as long as you are in school at least half-time.
  • Repayment is deferred until you graduate.
  • Interest may be tax-deductible.
  • The government will pay interest during times when you're approved to defer your loan.
  • If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments.
  • May be used to pay for a variety of college expenses, from tuition to campus living expenses, school supplies, travel, and more
  • Private student loans can help establish a good credit record.
  • Disbursements are made directly to your school and applied to your tuition and other direct costs.
  • Repayment is deferred until you graduate.
  • Good credit will help you considerably when applying for a private student loan.
  • If your credit isn't great, or if you haven't yet built it, you will need a credit-worthy cosigner
  • Most loan products have 0% front end fees.
  • You may choose a variable rate of interest or a fixed rate of interest.


  • Some loans are awarded on the basis of need, some loans are not.
  • The maximum loan you are eligible to borrow each year is limited by your grade level.
  • Interest is paid by the government for some loans, but not for others.
  • Loan fees (origination) are automatically deducted from each disbursement.
  • If you don't have good credit, and there is no one with good credit to cosign for you, you cannot get a private loan.
  • Some lenders have set rates such as the current LIBOR rate (London Interbank Offered Rate- the interest rate international banks charge each other to borrow U.S. dollars) or the Prime rate (interest rate that lenders give to their best customers).


  • Standard 10-year repayment term
  • Standard 15-year repayment term