Student Loans

Comparing Federal and Private Loans

Federal vs Private - This page on the Department of Education's website gives a good overview of the differences between the federal and private loan options for students.

Advising Tips

1. File the FAFSA every year to remain eligible for student aid.

2. Federal loans should be used only after grant and scholarship options have been exhausted.

3. If a student needs a loan, borrow from a Direct Subsidized Loans first, if eligible. The next option is to take out a Direct Unsubsidized Loans.

4. Private and alternative loans should be the last resort for financial aid.

Federal Loans

Federal Loans must be repaid. Students must complete a FAFSA to receive any federal loans.

This is an awesome website with clear explanations on different types of student loans.

Direct Subsidized Loan

The federal government will pay the interest on the loan while the student is enrolled in school as at least a half-time student, and when the student has authorization to defer loan payments. Students must be an undergraduate and meet specific financial criteria.

Direct Unsubsidized Loan

The student is responsible for the interest that accumulates on an unsubsidized loan while attending school, and during periods when they are authorized. Students are encouraged to make payments on the interest while they are in school if possible. This will decrease interest accrued over time. This loan is available regardless of financial need.

Federal PLUS Loan (Parent Loan)

To qualify to borrow a PLUS loan, a parent must be the student’s birth parent, adoptive parent or stepparent (if stepparent's income was used to calculate student's Expected Family Contribution). The parent applying for the loan is responsible for repaying the loan. PLUS loans are available without regard to financial need but have a credit check requirement.

Federal Perkins Loan

This federal loan program is available through participating schools to provide college financing to students with considerable financial need. Eligibility depends on your financial need and the availability of funds. Your school is your lender.

Private and Alternative Loans

FinAid - This website provides a good overview of all types of student loans, including private and alternative loans. It also lists some loan options. It is important that students realize private loans generally have higher interest rates and less forgiving repayment terms. Students would be well-advised to exhaust all federal and state government financial aid before taking out a private student loan.