Types of Student Loans

A student loan is a loan designed to assist students in covering the costs of post-secondary education, such as tuition, books, supplies, and living expenses. Student loans generally come from the federal government or from private student loan companies. Loans are different from other forms of financial aid for college, such as scholarships, because the expectation is that you will repay the money loaned to you.

Carefully review the terms of a student loan before accepting the loan. You should also watch out for student loan scams. The Federal Trade Commission and Federal Student Aid, an office of the U.S. Department of Education, both offer tips on avoiding student loan scams.

Federal vs. private student loans

Federal student loans are funded by the federal government while private student loans are funded by an institutional lender such as a bank, credit union, state agency, or a school. You must fill out the Free Application for Federal Student Aid (FAFSA) to determine your eligibility for federal loans. The FAFSA is also used by many states and colleges to award grants, scholarships, and loans. Make sure to check both federal and state deadlines, as well as checking with your colleges of interest on their FAFSA deadline.

Federal Student Aid provides more information on the differences between federal student loans and private student loans here, including a helpful chart.

The National Consumer Law Center’s Student Loan Borrower Assistance Project is another a great resource for information on both federal and private loans.

Types of federal student loans

Federal student loans come in several different forms. The terms, repayment options, interest, and who is responsible for the loan can vary between different loan types. For more information on the types of federal student loans available, review the information available from Federal Student Aid here and here.