Private Student Loans
A private education loan is a student loan issued by a private financial institution. Since they are not originated by the Department of Education, private loans will not be subsidized by the federal government. Additionally, private loans will not have the same features as their federal counterparts, so interest rates and repayment options will vary.
If you are considering a private education loan, make sure you:
- Exhaust all other possible sources of financial aid, including federal loans.
- Look for ways to reduce your expenses before you decide how much to borrow.
- Borrow only what you absolutely need.
- Ask questions and compare the rates and terms offered by different lenders. (See examples of questions to ask about private loans from the Project on Student Debt and US News & World Report)