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"Borrow federal first, because federal student loans are less expensive, more available and have better repayment terms than private student loans. Federal student loans have fixed interest rates that will not increase over the life of the loan, unlike variable interest rates which can change. Perkins Loans and Direct Subsidized and Unsubsidized Loans do not depend on the borrower’s credit history and do not require cosigners. Federal student loans offer generous deferment and forbearance options, flexible repayment plans like extended repayment, graduated repayment, and income-driven repayment, and opportunities of loan forgiveness programs like public service loan forgiveness."
"Private student loans should be considered only after reviewing federal education loan options. And what some students may learn, federal education loans may not be an option. Some reasons could be, the student may have reached the loan limits or otherwise have lost eligibility for federal student loans (e.g., dropping below half-time enrollment or failing to maintain satisfactory academic progress). The student’s parents may be unwilling or unable to borrow from the Parent PLUS Loan program. Private student loans may be available for previous school charges, for borrowers who are not seeking a degree or certificate (e.g., continuing education), for international students (usually with a creditworthy U.S. citizen or eligible non-citizen as cosigner), and for education costs incurred after graduation (e.g., bar study loans for law school graduates and residency and relocation loans for medical school graduates)." |