Compare Federal and Private Education Loans
As you determine the best way to finance your education, you should consider the full range of student financial aid options available to you. Private loans are often used to supplement federal student loans, when federal loans are not sufficient to cover the full cost of education.
Federal student loans are based largely on demonstrated financial need while private student loans, funded by banks and non-profit organizations, are credit-based loans, relying on the credit score of the student or cosigner if applicable.
Private Education Loans vs. Stafford Loan
| Private Education Loan | Federal Stafford Loan | |
|---|---|---|
| Funds Disbursement | Sent directly to school | Sent directly to school |
|
Annual Borrowing Amount
Stafford Loan amounts listed are for dependant undergraduate students. For complete Stafford Loan borrowing amounts please visit StaffordLoan.com. |
Cost of attendance minus other aid |
First year: $5,500 ($3,500 subsidized/$2,000 unsubsidized);
Second Year: $6,500 ($4,500 subsidized/$2,000 unsubsidized); Third Year and Beyond: $7,500 ($5,500 subsidized/$2,000 unsubsidized); Graduate or Professional: $20,500 ($8,500 subsidized/$12,000 unsubsidized) |
| Aggregate Lifetime Borrowing Amount | School determines maximum borrowing limit | $31,000 ($57,500 for independent student) |
| Deferment | Principal payments and interest payments are deferred while enrolled in school | Full deferment while enrolled in school at least half time, retain full deferment/forbearance options |
| Loan Eligibility | Enrolled at least half time at an eligible school; Must be a U.S. citizen or permanent resident. A cosigner may be required. Additional loan eligibility criteria | Must be a U.S. citizen or national, a U.S. permanent resident, or an eligible non-citizen; Must be enrolled at least half time in a non direct lending program that accepts Stafford loans. No cosigner required. |
| FAFSA Required? | No FAFSA required | Must file the FAFSA |
| Interest Rate | Contingent upon your credit history | 6.8% Unsubsidized/Graduate rate; 6.0% Subsidized rate |
| Repayment Term | 15-20 years | 10 years unless consolidated |
| Borrower Benefits | 0.25% rate discount if payments are auto-debited from a bank account | N/A |
