Here are some of the key differences between Federal Student Loans vs Private:
| Difference | Private Student Loan | Federal Student Loan |
|---|---|---|
| Lender | Bank, credit union, financial institution, state agency, or college/university | U.S. Department of Education |
| FAFSA Required? | No | Yes |
| Interest Rate Type | Fixed and variable options available | Fixed |
| Rates Based on Credit Criteria? | Yes | No |
| Cosigner Required? | Yes, unless borrower has strong credit history | No* |
| Repayment Plans | Varies by lender. Some lenders may offer multiple options. | Multiple plans (including income-driven) available |
| Forbearance Options | Varies by lender. Typically one year. | Three years |
*Direct PLUS Loans offered to parents of students attending college, or graduate students, require a credit check. If the borrower is found to have adverse credit, a cosigner may be required.