Compare Federal vs. Private Student Loan Options With These Helpful Charts

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

student loan comparison

Picking a student loan can feel as confusing as picking a health insurance plan. The options are presented in a whole new language, full of student loan terms you might not know.

If you find it hard to compare student loans, you’re not alone. In our latest survey of student loan borrowers, about 53% of respondents were only “somewhat confident” they knew how student loans worked.

To ensure you get the best out of borrowing, consider our student loan comparison charts below.

Student loan comparison chart for undergraduate borrowers

Undergraduates have three options for borrowing: Direct Subsidized and Unsubsidized Loans, Parent PLUS Loans, and private loans. Let’s see how they stack up.

Direct Loan (Federal) Parent PLUS Loan (Federal) Private Loan
Borrower Students Parents Students, parents
Credit check requirement No, but considers information from the Free Application for Federal Student Aid (FAFSA) Yes Yes
Cosigner option None Uses a guarantor in the case of adverse credit history Varies by lender
Annual borrowing limit $5,500 to $12,500 Up to the cost of attendance Varies
Aggregate loan limit $31,000 to $57,500 None Varies
Interest rate Fixed: 4.45% Fixed: 7.00% Fixed and variable rates vary
Origination fee 1.066% of total loan amount 4.264% of total loan amount Varies
Repayment terms 10 to 30 years 10 to 30 years 5 to 25 years
Repayment options 7, including income-driven repayment (IDR) plans 3 Varies
Payment deferment options Yes Yes Varies
Months of forbearance available No cumulative limit No cumulative limit 12 at most
Path to student loan forgiveness Yes Yes No
Contact for support Federal Student Aid (FSA) Ombudsman FSA Ombudsman Consumer Financial Protection Bureau (CFPB)
Key borrower criteria Minimum half-time enrollment in an eligible program, plus proven financial need (for subsidized loans) Borrow on behalf of a child enrolled at least half time in an eligible program Have a strong credit score and debt-to-income ratio or have a cosigner who does
Key borrower benefits Your interest is covered while you’re in school (subsidized loans), plus you have access to flexible repayment plans and protections You can request a deferment that delays repayment until six months after the student leaves school You could score a lower interest rate with a creditworthy cosigner

Student loan information and rates as of February 2018

Student loan comparison chart for graduate borrowers

Graduate and professional students have three options for borrowing: Direct Unsubsidized Loans, Graduate PLUS Loans, and private student loans. Let’s see how they compare.

Direct Unsubsidized Loan (Federal) Graduate PLUS Loan (Federal) Private Loan
Borrower Students Students Students, parents
Credit check requirement No, but considers information from the FAFSA Yes Yes
Cosigner option No Uses a guarantor in the case of adverse credit history Varies by lender
Annual borrowing limit $20,500 Up to the cost of attendance Varies
Aggregate loan limit $138,500, including undergraduate loans None Varies
Interest rate Fixed: 6.00% Fixed: 7.00% Fixed and variable rates vary
Origination fee 1.066% of total loan amount 4.264% of total loan amount Varies
Repayment terms 10 to 30 years 10 to 30 years 5 to 25 years
Repayment options 7, including IDR plans 7, including IDR Varies
Payment deferment options Yes Yes Varies
Months of forbearance available No cumulative limit No cumulative limit 12 at most
Path to student loan forgiveness Yes Yes No
Contact for support FSA Ombudsman FSA Ombudsman CFPB
Key borrower criteria Be enrolled at least half time in an eligible program Be enrolled at least half time in an eligible program Have a strong credit score and debt-to-income ratio or have a cosigner who does
Key borrower benefits You have access to flexible repayment plans and protections You have access to more federal loans after maxing out your Direct Unsubsidized Loan allotment Loans for special cases, such as for medical school residency, and your borrowing limits could be higher

Student loan information and rates as of February 2018

Compare student loans and key similarities

There are many ways federal loans and private loans are similar, such as:

  • No prepayment penalties
  • A six-month grace period when you leave school
  • A 0.25% interest rate reduction for autopay
  • Serious consequences for defaulting, such as wage garnishment
  • Difficult to discharge loans via bankruptcy
  • Eligibility for refinancing

Compare student loans and key differences

Private student loans might come with lower interest rates and fewer fees compared to federal student loans. But that’s only if you have a strong credit score and debt-to-income ratio or find a cosigner who does.

Although private lenders might offer you the ability to press pause on your repayment, their deferment or forbearance options likely pale in comparison to the federal government’s.

CommonBond, for example, is one private lender that offers up to 12 months of forbearance for economic hardship. But the Department of Education lets you halt your monthly payments for 12 months at a time if you can’t find work. And you can apply for additional forbearances if you face continued hardship.

Similarly, federal loans come with numerous repayment plans, plus the ability to switch your plan if necessary. Even the most reputable private lenders don’t typically offer more than four repayment plans. And those include in-school payment options.

It’s also worth noting that although federal and private loans are eligible for student loan refinancing, only federal loans are eligible for a Direct Consolidation Loan. A Direct Consolidation Loan could simplify your repayment and give you access to IDR even if it wouldn’t lower your interest rate the way that refinancing could.

When you compare student loans, remember that the best loan isn’t necessarily the one that sounds good right now. Consider how the loan will serve you when you’re in school and when you enter repayment.

For more student loan comparison tools, check out our term comparison calculator to help you decide the best way to approach repayment.

Need a student loan?

Here are our top student loan lenders of 2018!
LenderRates (APR)Eligibility 

1 = Citizens Disclaimer.

2 = CollegeAve Autopay Disclaimer: All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.

3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3.54% -
12.07%
2
Undergraduate, Graduate, and ParentsVisit CollegeAve
4.11% - 12.19%Undergraduate and GraduateVisit Ascent
4.00% - 11.85%*3Undergraduate and GraduateVisit SallieMae
2.93% -
9.67%
Undergraduate, Graduate, and ParentsVisit CommonBond
3.80% -
11.99%
1
Undergraduate, Graduate, and ParentsVisit Citizens
4.53% - 9.69%Undergraduate and GraduateVisit LendKey
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.