Student Loans ▼
-
What's the difference between federal and private student loans?
What's the difference between federal and private student loans?
Most student loans fall into one of two categories:
- Federal loans, which are funded or guaranteed by the federal government
- Private loans (sometimes called "alternative" loans), which are nonfederal loans funded by banks or other lenders such as credit unions, state agencies, or schools.
If you need to borrow money to pay for college or career school, start with federal loans.
Federal Student loans
Federal Parent loans
-
Direct PLUS Loans (for parents). Parents are fully responsible for paying these loans, even though they are taken out to benefit students.
Federal loans offer many advantages over private loans
- lower, fixed interest rates and
- more flexible repayment options such as
- Income Driven Repayment options
- Full or partial Loan Forgiveness for
- Public Service Employment
- Disability
- Defunct Colleges
- Corinthian, et al
The following chart, adapted from the U.S. Department of Education website, summarizes the important differences between federal and private student loans.
SubjectFederal Student LoansFederal Parent LoansPrivate Student Loans*When
payments become dueYou (the parent) can choose to put off payments until the student you borrowed for graduates, leaves school, or changes enrollment status to less than half-time.Many private student loans require payments while you are still in school, but some do allow you to defer (put off) payments while in school.Interest
ratesThe interest rate is fixed and is often lower than private loans—and much lower than some credit card interest rates. View the current interest rates on federal student loans.The interest rate is fixed and may be lower than private loans—and much lower than some credit card interest rates. View the current interest rates on federal student and parent loans.Private student loans can have variable or fixed interest rates, which may be higher or lower than the rates on federal loans depending on your circumstances.SubsidiesThese loans are not subsidized; therefore, you will be responsible for all the interest on your loans.Private student loans are often not subsidized. In the case of an unsubsidized loan, you will be responsible for all the interest on your loan.Credit
checkYou don’t need to get a credit check to qualify for federal student loans (except for PLUS loans). For PLUS loans, we will check your credit before determining whether you are eligible. Learn how someone with an adverse credit history may qualify for a PLUS loan.We will check your credit before determining whether you are eligible. Learn how someone with an adverse credit history may qualify for a PLUS loan.Private student loans often require an established credit record or a cosigner.Tax benefitsInterest may be tax deductible.Interest may be tax deductible.Interest may be tax deductible.Loans can be consolidated into a Direct Consolidation Loan. Learn about your consolidation options.Loans can be consolidated into a Direct Consolidation Loan. Learn about your consolidation options.Private student loans cannot be consolidated into a Direct Consolidation Loan but may be refinanced.Postponement optionsIf you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments.If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments.You should check with your lender to find out about options for postponing or lowering your loan payments.Repayment plansThere are several repayment plans, including an option to tie your monthly payment to your income.There are several repayment plans, including an option to tie your monthly payment to your income.You should check with your lender to find out about your repayment options.Prepayment penaltiesThere is no prepayment penalty fee.There is no prepayment penalty fee.You need to make sure there are no prepayment penalty fees.Loan
forgivenessYou may be eligible to have some portion of your loans forgiven if you work in public service. Learn about our loan forgiveness programs.You may be eligible to have some portion of your loans forgiven if you work in public service. Learn about our loan forgiveness programs.Although many private lenders do not offer loan forgiveness programs, some student loans from state agencies can be forgiven in certain circumstances.Where to get helpContact your loan servicer first. If you have difficulty with your loan servicer, send us feedback.Contact your loan servicer first. If you have difficulty with your loan servicer, contact the Consumer Financial Protection Bureau for assistance*Private loans differ by lender and by type of loan. Be sure you understand the terms of your loan, and keep in touch with your lender about any questions you may have.
-
What's the difference between Direct Loans, Stafford Loans, and FFEL Loans?
What's the difference between Direct Loans, Stafford Loans, and FFEL Loans?Most existing federal student loans came from just two loan programs: the William D. Ford Federal Direct Loan Program or the Federal Family Education Loan (FFEL) Program. The FFEL program was canceled as of July 1, 2010, which means that loans made on or after that date are Direct Loans. Loans made between August 10, 1993 and July 1, 2010 may be either FFEL or Direct Loans, depending on the lender.The basic difference between the two federal loan programs is that Direct Loans are funded by the U.S. Department of Education. FFEL Loans, on the other hand, came from private lenders. Those older loans were backed up ("guaranteed") by the federal government.Types of FFEL Loans. The FFEL program was created in 1965. Under the program, student or parent borrowers may have received one or more of the following types of loans: Subsidized or Unsubsidized Stafford Loans (formerly known as Guaranteed Student Loans (GSLs) or Federal Insured Student Loans (FISLs), Federal PLUS Loans or Federal Consolidation Loans. Many FFEL loans have been sold to the U.S. Department of Education, so you may be currently paying off FFEL loans as if they were direct loans.Types of Direct Loans. The Direct Loan program was created in 1993. Under the Direct Loan program, you may have received one or more of the following types of loans: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, or Direct Consolidation Loans. Direct Subsidized or Unsubsidized Loans were sometimes called "Direct Stafford Loans," but that terminology is not used for newer loans. You will repay these loans directly to the U.S. Department of Education.
How to Get Information About Your Loans
To find out what type of loan you have and learn more about its terms, see What If I Don't Know What Kind of Loan I Have?
Learn More
For a detailed history of federal student loan programs, we like this article from the Federal Education Budget Project of the New America Foundation.
-
What is a PLUS Loan?
What is a PLUS Loan?
PLUS Loans are federal student loans for graduate and professional students and parents of undergraduates. PLUS loans made to parents can't later be transferred to the child. The parent who receives the loan must repay it.
Borrowers can take out PLUS Loans up to the cost of attendance, which is determined by the school, minus any other financial aid the student receives. For PLUS Loans made between June 30, 2013 and July 1, 2014, the interest rate was 6.41%. PLUS Loans made between June 30, 2014 and July 1, 2015 carry an interest rate of 7.21%
You must pass a credit check to obtain PLUS Loans. If you don't qualify on your own, you may be able to get PLUS Loans with a cosigner (the Department of Education calls this person an "endorser").
For more details on PLUS Loans, see the U.S. Department of Education website.
-
What is a Perkins Loan?
What is a Perkins Loan?
A Perkins Loan is a federal student loan for low-income undergraduate or graduate students. From July 1, 1972 until October 17, 1986, these loans were called National Direct Student Loans (NDSLs). Before July 1, 1972, they were known as National Defense Student Loans, or NDSLs.
The interest rate on Perkins Loans is lower than the rate for other federal student loans, and the loan comes with more flexible terms -- such as additional repayment and cancellation options. And Perkins Loans are subsidized by the federal government, meaning you don't pay interest on the loans while you are in school or during periods of deferment.
Also, unlike other types of federal student loans, Perkins Loans are made by your school, using a combination of school and federal funds. This means the school is considered your lender, and you should contact the school directly if you have questions about your loan.
For more information, see Perkins Loans on the Federal Student Aid website.
-
What if I don't know what kind of loan I have?
What if I don't know what kind of loan I have?
When it comes to managing student loan debt, most of your choices depend on whether your loans are federal or private. If you're not sure what kind of loans you have, use the National Student Loan Data System. Choose "Financial Aid Review" and supply the requested information to get a list of all federal loans made to you.
To use the system, you will need to supply:
- your Social Security number
- the first two letters of your last name
- your date of birth, and
- your U.S. Department of Education PIN number.
The FSA ID replaced the Federal Student Aid PIN on May 10, 2015. If you haven’t logged in to a U.S. Department of Education (ED) online system since then, you’ll need to create an FSA ID before you can use U.S. Department of Education online systems.
Once you get to the list of your loans, you can click on each loan to get details about it, including exactly what kind of federal loan it is and who services it.
If you have student loans that aren't on the national database list, it means they are private loans. For more information, you'll need to contact the financial institution that made the loan.
-
What is student loan deferment?
What is student loan deferment?
A deferment allows you to temporarily stop paying your federal student loans. You qualify for a deferment if you meet certain conditions -- for example, if you are unemployed and looking for work, or if you return to school at least half time. If you are eligible for a deferment, you can postpone payment on both the principal and interest of your loans. In some cases, the federal government will even pay the interest for you. In other situations, interest continues to accrue during the deferment period.
For more information, see How Do I Postpone My Student Loan Payments?
-
What is student loan forbearance?
What is student loan forbearance?
A student loan forbearance, like a deferment, allows you to postpone or reduce your federal student loan payments for a set period of time. However, it is often easier to get a forbearance than a deferment -- for example, you may qualify even if your loan is in default, or if you are experiencing financial hardship that falls short of conditions for deferment. The downside is that forbearance is usually more expensive than deferment. Interest always accrues during a forbearance, causing your loan balance to grow.
For more information, see How Do I Postpone My Student Loan Payments?
-
What is student loan default?
What is student loan default?
Default is what happens if you fall behind on your student loan payments. For most loans, if you fail to make a payment for 270 days (that's nine months) the loan will go into default. After that, your school, the loan servicer, or the government can take action against you to get back what you owe. You may face serious legal and practical consequences if you default on your student loans.
To learn how to avoid default, see What If I Can't Pay My Student Loans?
For more information about the consequences of default, see What Happens If I Default on My Student Loans?
If your loans are already in default, see How to Get Out of Student Loan Default.
-
Can student loan debt ruin your credit report?
Can student loan debt ruin your credit report?
Skipping payments or defaulting on a student loan can have serious and lasting effects on your credit. When a delinquency or default notation appears on your credit report you may have more trouble with basic financial tasks such as:
- getting a mortgage, car loan, or credit cards
- renting an apartment
- maintaining favorable interest rates on your existing loans or credit cards
- opening bank accounts
- obtaining insurance policies
- getting a cell phone contract, or
- getting a job.
Most negative information is removed from your credit report after seven years, but student loan defaults may remain on your record much longer. Defaults for a federal student loan may be reported for seven years after the most recent of the following dates:
- when it's paid off
- when it's first reported, or
- if you rehabilitated the loan, when you re-default on it.
(See 20 U.S.C. §§ 1080a(f).)
If you default on a federal Perkins loan, the default can remain on your credit record until you pay the loan in full. (See 20 U.S.C. § 1087cc(c)(3).)
The consequences of default go well beyond damage to your credit report. To learn more, see What Happens If I Default on My Student Loans?
If your loans are already in default and you're looking for solutions, see How to Get Out of Student Loan Default.
-
What is a Pell Grant?
What is a Pell Grant?
Pell Grants are in the news lately since the Federal Government announced that federal Student Loans will get loan forgiveness of $10,000 and up to $20,000 for those who qualified for a Pell grant.
Pell grants are currently awarded to students whose "expected family contribution" to their college is less than $5846, and can range from $650 to 6,495.
Pell grants are awarded based on the information in your FAFSA application.
-
How do I file a student loan complaint?
How do I file a student loan complaint?
If you find yourself in a dispute with the holder or servicer of your student loan, you should first take steps to resolve the problem directly. If that doesn't work, the following services are available to assist you.
Filing a Federal Student Loan Complaint
If you're having difficulty with the lender or servicer of your federally guaranteed student loan, you can get help from the Department of Education. For guidelines, visit the Federal Student Aid Ombudsman website or call 877-557-2575.
Filing a Private Student Loan Complaint
If you're having trouble with private student loan company or a collection agency, you can turn to the Consumer Financial Protection Bureau (CFPB). The CFPB provides services to assist you in resolving complaints about your private student loans. For more information, visit the CFPB Student Loan Complaints website or all 855-411-2372.
Learn More
For more details and additional resources, including additional tips for working out student loan problems without filing a formal complaint, see How to Get Help With Student Loan Problems.
-
About This Website
About This Website
We built this website to get you the answers you need about getting out of student loan debt. When you choose your state or enter your zip code on our home page, you will quickly learn how to get organized so you can:
- choose the right payment plan
- lower or put off your monthly payments
- cancel your student loans, if possible
- avoid defaulting on your loans -- or get out of default if it's too late
- get help with student loan problems, including finding a lawyer in Idaho
- file a complaint agains a student loan lender
- and more.
Our goal is to guide you to reliable information about managing your loans, providing resources tailored for Idaho when available.
Who We Are
Legal Consumer
Legal Consumer is a company that believes you should have access to quality information about the legal issues affecting your life. Whether you’re facing financial difficulties, health concerns, or trouble at your job, we want to help you find the resources you need. Our websites are written by lawyers and designed to give you accurate, relevant information for your location.