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Benefits of Federal Student Loans & Considerations When Applying For a Private Loan

Benefits of Federal Student Loans

  • Federal Loans have a pre-determined, fixed interest rate which is often lower than those offered through private loans.
  • The interest on Direct Subsidized federal loans is paid by the government as long as the student is enrolled at least half-time, as well as through the grace period.
  • Federal loans are offered each year a student files a FAFSA, provided they meet general eligibility requirements.
  • Once a student graduates, they have the option to consolidate federal loans for a lower payment. 
  • Federal loans have many repayment options that may be beneficial to students as they enter repayment or if they experience financial hardships during periods of repayment.
  • Some students may qualify for loan forgiveness programs.
  • For more information and answers to frequently asked questions, visit the Federal Student Aid website.

Considerations When Applying for a Private Loan

  • Does the lender offer fixed and/or variable interest rates?
  • Are loan processing and/or origination fees charged?
  • What are the loan repayment options?
  • When does repayment begin?
  • Can the loan co-signer be released during repayment?
  • Have you taken advantage of federal loan options?
  • Have you explored and exhausted other means of educational funding?
  • If you have difficulty making payments, what options do you have?
  • Are there pre-payment penalties?
  • Are there deferment or forbearance options available?