What’s the difference between federal student loans and private student loans?
Among the differences between these two important student loan programs are:
Private student loans*
- Can help cover qualified education expenses when federal student loans aren’t enough to fund your entire education
- Have interest rates and fees that are determined by the lender and often depend on your credit rating
- May require the borrower to have a cosigner, if the student does not qualify alone
- May let you defer payments until six months after graduation or leaving school, or you are no longer enrolled in school or, if requested and approved, nine months after your graduate health professions residency is completed
- May require school certification and completion of the FAFSA
- Require completion of a self-certification form
Federal student loans
- Have low fixed interest rates
- May include federally-subsidized interest
- Provide options to postpone payments
- May have a longer repayment term
- Offer easier or no credit requirements
- Generally require completion of the FASFA
- Require school certification
- Can cover qualified education expenses
- May offer borrower benefits in the form of interest rate discounts or rebates
If, after you’ve checked for scholarships and grants, you decide you need additional assistance paying for your education, it’s time to look to federal student loans. These are long-term loans with low fixed interest rates designed exclusively for those needing money to meet the costs associated with education.
Federal student loans are the largest source of student loans around. They have attractive terms when compared to most other borrowing options—such as low fixed interest rates, federal subsidized interest possibilities, options to postpone payments, longer repayment terms, and easier or no credit requirements. You will need to complete the Free Application for Federal Student Aid (FAFSA) before you can apply for most federal student loans.
You should always plan to look for federal student loan options before investigating private student loan sources, because private loans are sometimes more difficult to obtain and can often end up being very costly to you in the end. Private student loans are designed to supplement federal student loan programs and are available from schools, banks and student loan organizations.*
Remember: Any college loan has to be repaid—even if you don’t finish school, are unhappy with the education you received, are unable to find a job, or are making less money than you planned. Borrow wisely because the amount of money you borrow now will have long-term effects that can influence your lifestyle!
*Important Information: As students determine the best way to finance their education, they should consider the full range of student financial aid options available. Private loans can be used when federal loans, grants and other forms of financial aid are not sufficient to cover the full cost of attendance.
Chase services its private student loans and does not sell them to another lender.
Chase private student loans are subject to credit approval, receipt of a completed and signed loan application/promissory note and self-certification form, verification of application information, acceptance of loan terms, and school certification of loan amount and student’s enrollment at a Chase-participating school.
This information was current as of 02/01/2010 and is subject to change. Contact Chase for the most up-to-date terms.
