Federal vs. Private Student Loans: What’s the Difference?

If you’re shopping for a student loan, federal and private loans each offer unique benefits. With federal loans, you’ll see fixed rates and terms, special repayment plans, and programs such as potential loan forgiveness. The amount you can borrow is set by your school, but you won’t have to worry about paying your loans back until you graduate—unless you switch to part-time.

Private student loans can have fixed or variable rates and you can borrower up to your school’s cost of attendance. Loan forgiveness isn’t as common, but you likely won’t have to start paying your loans back until you graduate—just make sure you understand the loan terms, as they can vary.

Many students take out federal loans during school and then refinance with a private lender after graduation—this approach can save you money and hassle over the long run—but you’ll lose the benefits such as potential loan forgiveness that come with federal loans.

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