what’s the difference between a private student loan to federal stafford loan?

Federal student loans are guaranteed by the federal government, are available without a cosigner, have low, fixed, tax deductible interest rates and generous deferment, forebearance and forgiveness provisions. You must file a FAFSA to be eligible and you must do loan counseling and sign an electronic master pnote (EMPN). The loan amounts are limited by your grade level.

Private student loans generally require a cosigner, have high variable interest rates that are not tax deductible. There are forebearance provisions but no forgiveness or true deferrments granted. You do not have to file a FAFSA or do loan counseling. You and the cosigner sign a pnote. The amount is limited by credit rating and the college’s cost of attendance.

I rarely advise students to choose private loans. Federal student and parent loans are much better bargains. Talk to a financial aid officer at your school for more information.

If you can AVOID a private student loan. It’s a loan through a bank or credit union with pretty high interest rates. Talking about 20% and up here! Federal loans are much better, since there’s usually a cap on how high they can raise the interest.

federal stafford loans are guaranteed by the government and have a relatively low interest rate. you can either get a subsidized or unsubsidized stafford loan. subsidized loans are those which the government pays the interest while you are in school. you accumulate interest while you are in school for unsub loans. private loans are through banks and are credit based. these have MUCH higher interest rates, sometimes up to 30%. if you don’t have to do so, don’t take much money out from private loans. hope that helps!

Stafford Loans have a lot lower interest rate…get those first if you can!

Try going to this site, they have lots of information about this sort of stuff.