Understand federal and private student loans

With any loan, you have to pay back the money you borrow, plus interest, whether you graduate or not. It's a legal transaction, so make sure you understand what you're signing. If something isn't clear, ask for help.


Federal student loans vs private student loans

  Federal student loans Private student loans

How do you get one?

Submit the FAFSA Apply directly with the bank or financial institution that issues the loan

Is your credit history considered?

You don’t need to get a credit check for most federal student loans (except for PLUS loans) Yes, along with other factors

Is there a limit to how much you can borrow?

Yes, it’s determined by your FAFSA Varies by lender

Will it help to have a cosigner?

No Yes, if you don’t have a strong credit history

Does financial need count? [financial need is the difference between the cost of attendance (COA) and the expected family contribution (EFC)]

Yes, you may qualify for a subsidized loan No

Can you change your repayment plan after you take out a loan?

Yes Generally no

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This information was gathered on 7/18/2016 from https://studentaid.ed.gov/sa/.