Student Loan Comparison Charts: Federal vs. Private Loans

Types of Student Loans

Whether you’re trying to decide between federal student loans and private loans, or if you’re just looking for the differences between these options, there are many types of student loans for you to choose from.

Here, you can compare the different types of federal student loans for undergraduates and some of the lenders that offer private student loans. 

Confused about any of the terms in the tables or about student loans in general? Check out our glossary at the bottom of the page! There’s also a whole section dedicated to the different types of repayment plans available for federal and private student loans so that you can choose the perfect option for you.

Types of Student Loans for Undergraduates

As four out of every ten adults under the age of 30 have student loan debt, and as the cost of attending college continues to increase, it’s important for students to understand all of their options when it comes to taking out loans.

There are two types of student loans:

  1. Federal student loans
  2. Private student loans

Keep in mind that, as the charts below show, there are many types of each, all with unique benefits and restrictions. 

For instance, many of the federal student loans offer a lower interest rate than private loans. However, most of the federal loans have more requirements and limits, such as cumulative limits or the amount you can borrow in a particular loan program.

Check out the table below that compares the different types of student loans.

Undergraduate Student Loan Options
CharacteristicPerkins LoansDirect Subsidized LoansDirect Unsubsidized LoansParent PLUS LoansPrivate Student Loans
Annual Limits$5,500$3,500 to $5,500$5,500 to $7,500 ($9,500 to $12,500 for Independent Undergraduate Students)Cost of attendance (determined by school) minus other financial assistanceCost of attendance minus other financial assistance
Cumulative Limits$27,500$23,000$31,000 ($57,000 for Independent Undergraduate Students)NoneVaries by Lender
Cosigner Required?NoNoNoOnly if borrower (parent) has adverse credit history (student cannot be cosigner)Most student borrowers will require cosigner if they don’t meet credit criteria
Cosigner Release OptionN/AN/AN/ANoVaries by Lender (Typically requires 12 to 48-consecutive on-time monthly payments)
Credit CriteriaNoneNoneNoneBorrower cannot have adverse credit historyDebt-to-income ratio; minimum income; credit scores; no adverse credit history
Interest Rates Based on Credit CriteriaNoNoNoNoYes
Interest Rate TypeFixedFixedFixedFixedFixed and Variable Options
Interest Rate5%4.45%4.45%7%Depends on credit of borrower and cosigner
Subsidized InterestYesYesNoNoNo
Interest CapitalizationN/AN/AAt RepaymentAt RepaymentVaries by Lender (Options include: Monthly, Quarterly, Annually, or Once at Repayment)
Rate Reduction for Automatic Debit0.25%0.25%0.25%0.25%Varies by Lender
Loan FeesNone1.069% Origination fee1.069% Origination fee4.264%Varies by Lender
Requires School CertificationYesYesYesYesYes
Requires FAFSAYesYesYesYesNo
Requires Half-Time EnrollmentYesYesYesYesVaries by Lender (Most require half-time enrollment)
Available for Unpaid Prior School Year ChargesNoNoNoNoVaries by Lender
Available for Continuing EducationNoNoNoNoVaries by Lender
Bar Study, Residency, and Relocation LoansNoNoNoNoYes
BorrowerUndergraduate StudentUndergraduate StudentUndergraduate StudentParents of Dependent Undergraduate StudentStudents and Parents
LenderCollege or UniversityU.S. Department of EducationU.S. Department of EducationU.S. Department of EducationBanks, Credit Unions, Financial Institutions, State Agencies, Colleges and Universities
Secured?NoNoNoNoNo
Student Loan Interest DeductionYesYesYesYesYes
Interest Rate Reduction for In-School Interest PaymentsNoNoNoNoVaries by Lender
In-School and Grace Period Deferment OptionsFull DefermentFull DefermentFull Deferment or Immediate RepaymentImmediate Repayment (or can request Full Deferment)Varies by Lender (Most allow full deferment and grace period)
Grace Period Length9 months6 months6 months6 monthsVaries by Lender (Most offer 6-month grace period)
Forbearance Options3 years3 years3 years3 years1 year
Repayment Term10 years, may change if consolidated10 to 30 years, depending on the Repayment Plan you choose10 to 30 years, depending on the Repayment Plan you choose10 to 30 years, depending on the Repayment Plan you chooseVaries by Lender (Usually 5 to 25 years)
Repayment PlansStandard (Other options if consolidated)Standard, Graduated, Extended, REPAYE, ICR, PAYE, IBRStandard, Graduated, Extended, REPAYE, ICR, PAYE, IBRStandard, Graduated, ExtendedVaries by Lender
Public Service Loan ForgivenessOnly if ConsolidatedYesYesNoNo
Death DischargeYesYesYesYes, if borrower or student diesVaries by Lender
Total and Permanent Disability DischargeYesYesYesYesVaries by Lender
Prepayment PenaltiesNoneNoneNoneNoneNone
Can be Consolidated?Yes, but loses some of the benefitsYes, but rates do not relockYes, but rates do not relockYes, but rates do not relockVaries by Lender (Rate based on current credit)
Dischargeable in BankruptcyOnly through filing a separate action, known as an “adversary proceeding”, in addition to all bankruptcy filings. This shows that repayment would impose undue hardship on you and your dependents. This is very difficult to prove and your creditors (lenders) may challenge your request.
Consequences of DefaultEntire unpaid balance of loan and any interest becomes due immediately (acceleration); Can no longer receive deferment or forbearance; Lose eligibility for additional federal student aid; Damage to credit score; Tax refunds and federal benefit payments may be withheld; Wage garnishment; May be sued; May not be able to purchase or sell assets (such as real estate); May be charged court costs, collection fees, attorney’s fees, and other collection costs; School may withhold academic transcript until your defaulted student loan is satisfiedSued by lender for collection costs; May have wage garnishment through court order; Negative credit reports
Subject to Statutes of LimitationsNoNoNoNoYes
Subject to Defense of InfancyNoNoNoNoYes
Truth-in-Lending Act (TILA) Disclosures RequiredNoNoNoNoYes
OversightFSA OmbudsmenFSA OmbudsmanFSA OmbudsmanFSA OmbudsmanFSA Ombudsman

5 Steps to Apply for Federal Student Loans

  1. Complete the Free Application for Federal Student Aid (FAFSA®)
  2. Receive Student Aid Report (SAR) (gives your eligibility for financial aid)
  3. Colleges you’ve been accepted to will send you a financial aid award letter detailing the financial aid you’re eligible to receive
  4. Complete entrance counseling (tool that ensures you understand your obligation to repay the loan)
  5. Sign a Master Promissory Note (MPN) (this means you agree to the terms of the loan)

Federal Student Loan Options

The five main federal loan programs are:

  1. Direct Student Loans: Need based loans made to student that can be either subsidized or unsubsidized.
  2. Direct PLUS Loans for Parents: Loans to parents up to the coast of attendance.
  3. Direct Graduate PLUS Loan: Graduate students can borrow up to the cost of attendance.
  4. Direct Consolidation Loans: Students and parents with one or more federal student loan can combine them into one loan.
  5. Federal Perkins Loan: Fixed interest federal loan for undergraduates and some graduate students with exceptional need.

American Student Loan Debt

According to a study by Pew Research, as of June 2017, Americans owed more than $1.3 trillion in student loans, more than two and a half times what they owed ten years ago.

Private Student Loans

Private student loans come in a wider variety than federal loans because banks, credit unions, and other lenders are looking to satisfy the needs of different customers. However, most of the time these loans require that you have a good credit score to qualify for a loan, or that you have a cosigner does.

Plus, you and your cosigner’s credit will affect the interest rate that you receive, whether you choose a fixed rate or a variable APR.

Below are some of the private banks and lenders that offer private student loans and the characteristics of each.

Comparison of Private Student Loans
Bank / InstitutionRates from (APR)Loan TermsEligible DegreesOther Notes
Wells Fargo4.34% to 10.30% (Variable) and 5.94% to 11.26% (Fixed) (Depends on state, institution, degree, and fixed or variable loan)Most common is 15-year repayment term, though other options are available; no application or origination fees; offers 48-month deferment, plus a 6-month grace period; eligible for forbearance and death or total and permanent disability loan forgivenessUndergraduate, Community Colleges, Career Schools, Traditional Colleges and Universities, Graduate DegreesParents may take out student loan at a different APR: 5.49% to 11.99% (Variable Interest Rate) and 6.49% to 12.99% (Fixed); offers 0.25% interest rate reduction for automatic payments and another 0.25% reduction for Wells Fargo customers
PNCVariable APR ranges from 4.77% to 11.85% Fixed APR ranges from 6.26% to 12.99%Up to 15-year repayment terms; full deferment available, plus 6-month grace periodUndergraduate Degrees, Certificate Programs, Graduate Degrees, Health and Medical Professions, Health Residencies, Bar Study,Offers cosigner release after 48 consecutive on-time monthly payments; Reduce interest rate .50% with automated payments
Sallie MaeVariable APR ranges from 3.87% to 10.75% Fixed APR ranges from 5.74% to 11.85%Three different repayment options: 1. Full deferment (Plus 6-month grace period) 2. Fixed Monthly Payments ($25 per month while in school) 3. In School Interest Only RepaymentAssociate’s, Bachelor’s, Certificates, Career Training, Graduate Degrees, Medical, Dental, and Health ProfessionsInterest rate reduction 0.25% when you enroll in automated monthly payments; Can request to make 12 monthly interest-only payments after you finish school
Connext (A service from Reliamax)Variable APR ranges from 4.16% to 11.45%; Fixed APR ranges from 5.65% to 10.76%10 or 15-year repayment plans; offers Full Deferment repayment planUndergraduate and Graduate DegreesNo origination fees; Offers 0.25% interest rate reduction for automatic monthly payments; Works with a network of regional banks and credit unions; offers 6-month grace period
LendkeyVariable APR rates as low as 4.76%; Fixed APR rates as low as 5.36%Check eligibility by applying and receive offers from various community lendersUndergraduate, Graduate, OthersCommunity based lenders, such as credit unions and community banks; Many lenders offer cosigner release, no application or loan origination fees, and interest rate reductions of up to 0.25% for automated monthly payments
SunTrustVariable APR ranges from 3.751% to 10.800%; Fixed APR ranges from 4.751% to 11.500%7, 10, or 15-year repayment options; offers four repayment options: 1. In-School Full Deferment 2. Immediate Repayment 3. Fixed Monthly Payments ($25 per month while in school) 4. In-School Interest Only RepaymentEnrolled at least half-time in a Bachelor’s, Graduate, or Professional Degree program at an approved school, usually a 4-year public or private college or universityOffers 0.25% interest rate reduction for automatic monthly payments (plus additional 0.25% reduction from a SunTrust bank account); Offers cosigner release after 36 on-time monthly payments; Receive a 1% reduction in student loan principle when you graduate; No application, origination, or prepayment fees
College Ave.Variable APR ranges from 3.79% to 11.06%; Fixed APR ranges from 5.56% to 12.32%8, 10, 12, 15-year repayment options; Four types of repayment options: 1. Full Deferment 2. Immediate Repayment 3. In-School Interest Only 4. Fixed Monthly Payments (Pay $25 per month while in school)Undergraduate, Graduate, ProfessionalOffers 0.25% interest rate reduction for automatic payments; No application or origination fees
AscentVariable APR ranges from 4.11% to 10.36%; Fixed APR ranges from 5.85% to 12.19%5, 12, or 15-year repayment options; Three types of repayment plans: 1. Full Deferment 2. In-school Interest Only Repayment 3. Fixed Monthly Payments ($25 per month while in school)Undergraduate and Graduate DegreesNo application, origination, or prepayment fees; Offers 0.25% interest rate reduction for automatic monthly payments; Offers 6-month grace period
CommonBondFixed and Variable interest rate options, APR ranges from 3.73% to 9.31%5, 10, and 15-year repayment plans; Four repayment plans: 1. Full Deferment 2. Fixed Monthly Payments ($25 per month while in school) 3. Interest Only Repayment 4. Immediate repaymentUndergraduate, Graduate, MBA2% origination fee; No prepayment penalties; Offers 0.25% interest rate reduction for automatic payments; Offers forbearance to students facing economic hardship; Offers cosigner release after 24 consecutive months of full, on-time payments; Offers 6-month grace period

Median Student Loan Debt

In 2016, the median self-reported student loan debt for bachelor’s degree holders was $25,000.

Student Loan Glossary

Accrued Interest: Amount of money to be repaid on a loan in addition to the original principle amount borrowed.

Annual Limits: The maximum amount a student can borrow from a certain loan program in a given academic year.

Available for Continuing Education: Many continuing education programs do not award degrees and do not require half-time enrollment, which is why many federal loans don’t offer options for these programs.

Consolidation Loans (Consolidated): Federal loan that combines loans from multiple lenders.

Cosigner Release Options: Some loans offer an option that allows a cosigner to be taken off of the loan, usually after a certain number of consecutive, on-time payments have been made.

Cumulative Limits: The total amount you can borrow from a specific type of student loan. Most federal loans have cumulative limits, while most private loans and loans to parents don’t have any limits.

Forbearance: A period of time which your monthly payments are reduced or suspended entirely due to financial hardships. During this time, the unpaid interest is added to the principle balance (capitalized).

Forbearance Options: The different lengths of time that you may suspend or reduce your monthly payments.

Interest Capitalization: This is when unpaid interest is added to your loan principle. Typically, this happens at specific times during the life of your loan, such as before your first payment if you have chosen full deferment. Any interest that has built up is added to the principle.

Interest Rate Reduction for In-School Interest Payments: Loan terms that allow you to reduce your interest rate for making interest payments while you’re still in school.

In-School and Grace Period Deferment Options: The period of time while the student is enrolled at least on a half-time basis, and for a specific amount of time afterward, when the borrower is not required to make any payments on a student loan.

Origination Fee: The fee charged to borrowers for taking out a loan.

Public Service Loan Forgiveness: This program allows borrowers who make 120 qualifying monthly payments on federal Direct Loans under a qualifying repayment plan while working full-time for a qualifying public service employer to have their loans forgiven on an annual basis.

  • Qualifying public service employers include:
    • Section 501(c)(3) organizations if they provide at least one of the qualifying public services
    • Licensed or regulated child care, Head Start, and state funded pre-kindergarten programs
    • Organizations that are publicly funded and whose principal purposes include crime prevention, control or reduction of crime, or the enforcement of criminal law
    • Services that provide educational enrichment or support directly to students or their families in a school or school-like setting
    • Organizations that employ nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health support occupations

Rate Reduction for Automatic Debit: An option that reduces the interest rate on your loan if you sign up for automatic monthly payments through a debit or checking account.

Repayment Plans: The various options you have in repaying your student loan. (Listed below, with descriptions of different options)

Repayment Terms: The different number of years you have to pay back your student loan, which varies between federal loans and private loans.

Requires Half-Time Enrollment: Many loans require that you maintain at least half-time enrollment, which is usually considered a minimum of six semester hours per academic term.

Subject to Defense of Infancy: This states that minors do not have the legal capacity to enter into contracts, making loans to minors unenforceable. Federal student loans are not subject to the defense of infancy, though private student loans are.

Subject to Statutes of Limitations: The length of time that a creditor has to sue you for an unpaid debt, which applies to private student loans but not to federal student loans.

Subsidized Interest: Part of a subsidized loan, this is when the federal government pays the interest of the loan while you are in school, during grace periods, and during deferment periods.

Subsidized Loans: The federal government pays the interest on these loans, if they meet certain requirements, that accrues while you’re in school, during your grace period, during authorized deferment periods, and post-deferment grace periods.

Truth-in-Lending Act (TILA) Disclosures: Requires that borrowers receive written disclosures about important terms of credit before they are legally bound to pay the loan. Some of the important terms are the APR (Annual Percentage Rate), Finance Charge, and the total number of payments.

Unsubsidized Loans: The borrower pays the interest that accrues while the student is in school, during grace periods, and during deferment periods.

Federal Student Loan Repayment Plans

Standard Repayment Plan (10 to 30 years): May save you money over time because your monthly payments will be higher than payments for other plans, but you’ll pay your loan off in the shortest time, saving you on interest payments.i

Graduated Repayment Plan (10 and 30 years): This plan is designed for those who may have a low income now, but expect it to increase steadily over time. Your monthly payments for these plans start out low and increase every two years. Monthly payments will never be less than the amount of interest that accrues between payments and never more than three times any other payment.ii

Extended Repayment Plan (Up to 25 years): By offering lower monthly payments over a longer period of time than under plans such as the Standard Repayment Plan, the Extended Repayment Plan has the option of fixed or graduated monthly payment.iii

Income-Driven Repayment Plans: Have monthly payments set at an amount that is intended to be affordable based on your income and family size. There are four different income-driven repayment plans:

  1. Revised Pay as You Earn Repayment Plan (REPAYE Plan) (20 years for undergraduate): Payment amounts are generally 10% of your discretionary income.
  2. Pay as You Earn Repayment Plan (PAYE Plan) (20 years): Payment amounts are generally 10% of your discretionary income, but never more than the 10-year Standard Repayment Plan amount.
  3. Income-Based Repayment Plan (IBR Plan) (20 years for new borrowers after July 1, 2014): New borrowers after July 1, 2014 generally have monthly payments of 10% of your discretionary income, but never more than the 10-year Standard Repayment Plan amount. For those who are not new borrowers on or after July 1, 2014, the monthly payments are generally 15% of your discretionary income.
  4. Income-Contingent Repayment Plan (ICR Plan) (25 years): Monthly payment amounts are the lesser between 20% of your discretionary income or what you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income.iv

Private Student Loan Repayment Plans

This list includes the four most common plans private banks, credit unions, and other lenders offer for you to repay your student loans. Most lenders offer multiple options, but check with each individual lender for specific options. Keep in mind that different private lenders may not offer all four and many lenders have different names or requirements for these plans.

  1. Full Deferment: This option postpones all payments until after you graduate or drop below half-time enrollment (for many loans). Many lenders also offer a grace period, which is included in the deferment. Often, this is the most expensive option over the life of the loan because of the capitalized interest. However, it also provides flexibility in your monthly budget while you’re in school.
  2. In-School Interest Only: Allows you to pay just the interest that accrues every month while you’re still in school. This usually allows you to pay less over the length of your loan, as the interest isn’t capitalized after your deferment period.
  3. Fixed Monthly Payments (In School): This option allows you to pay a fixed amount, usually $25, every month while you’re still in school (or enrolled at least half-time) to reduce the interest that capitalizes after your deferment period and any grace periods.
  4. Immediate Repayment: This plan allows you to start repaying your loan immediately, while you’re still in school, which reduces the amount of interest you’ll pay over the life of the loan.

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studentaid.ed.gov/sa/repay-loans/understand/plans/standard

ii studentaid.ed.gov/sa/repay-loans/understand/plans/graduated

iii studentaid.ed.gov/sa/repay-loans/understand/plans/extended

iv studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven