Federal and Private Loans

What’s the Issue?

There are two types of loans that will help you pay for a postsecondary education, federal and private.  Federal loans are given by one of two national programs:  Federal Direct Student Loan Program (FDSLP), where the government gives the funds directly to the student or parent; and Federal Family Education Loan Program (FFELP), where private lenders provide the funds and the government guarantees against default.  With private loans, banks, credit unions, and savings and loan associations pay the funds and assume all the risk.

How does this affect me?

EXPLORE ALL TYPES OF FEDERAL AND STATE FINANCIAL ASSISTANCE BEFORE COMMITTING TO A PRIVATE STUDENT LOAN. TYPICALLY, PRIVATE ALTERNATIVE STUDENT LOANS HAVE VERY DIFFERENT AND MORE RESTRICTIVE TERMS THAN FEDERAL STUDENT LOANS AND ARE MORE EXPENSIVE. YOU WILL WANT TO BE KNOWLEDGEABLE ABOUT THESE LOANS AND UNDERSTAND THE AVAILABLE ALTERNATIVES BEFORE YOU SIGN UP FOR A LOAN THAT WILL REQUIRE YEARS OF REPAYMENT.

Helpful Resources

http://www.vault.com/studentloans/articles.jsp?type=3&ch_id=350&article_id=24806035&cat_id=2931

http://studentaid.ed.gov/PORTALSWebApp/students/english/glossary.jsp

http://www.studentloannetwork.com/

Comments