Federal Student Loans vs. Private Student Loans
A college student looking for
student loans on the will
find dozens of links to student lenders on an Internet
search engine. Many of them will promise to approve
$30,000 or more in student loans in 20 minutes or less.
Other student loan lenders say they can deliver their
private student loans faster and more proficiently than
the federal loan program.
Many people believe that
private student loan lenders
are misleading students. There has been a lot of
confusion; students have been deceived in many different
ways. Families should be encouraged to take advantage of
all government financial aid programs they're eligible
for before seeking assistance from private lending
organizations, but many private student loan companies
advertise in a way that it seems that they’re dissuading
the pursuit of federal student loans.
Almost 50% of undergraduates with private loans in 2003
did not borrow the maximum available from the Stafford
program first. About 25% of those students bypassed the
federal loan program completely.
Some student borrowers might not understand the
difference between federal and private loans. Often,
both types of loans are provided by the same lenders.
Students might also be intimidated by the application
forms for federal loans. Student borrowers are more
likely to use the
quick and easy type of approach that
private lenders offer.