What is the Difference between Getting a Federal Student Loan and a Private Student Loan?
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A federal student loan is a specific type of loan that is aided to the student from the federal government; this allows the student to loan what the student needs financially. There is no need to pay the money back until the student has graduated from college or has otherwise decided to stop attending school. This loan can be used for books, transportation, moving costs, or a variety of other scholastic needs. When applying for this loan the student may even find out they are eligible for grants that they were previously unaware of.

There are a variety of different lenders that are going to try provide a loan. This is done to make money off interest and fees. It is the student's job is to weed out bad loans and find federal student loan providers that do not charge outrageous interest rates. Federal student loans are typically the smaller loan amounts given to and they generally have a more relaxed repayment plan.

A private student loan is a much more popular loan because these loan out much higher lump sums. This loan is given to the student if they qualify after applying (to the lender of their choice). The money requested is normally given to undergraduates in a large check but tend to contain hidden charges and exorbitant fees to pay back. Generally, 3% to 4% in fees is the same as 1% interest rate. A private student loan is more difficult to get and has more complex repayment terms. The only reason a student should try for a private student loan is if they have maxed out the federal student loan amount and have no other alternatives.

With understanding the difference between a federal and private student loan, students can better prepare themselves for the eventual repayment terms ahead of time and fully concentrate on their college experience.


What is the Difference between Getting a Federal Student Loan and a Private Student Loan?
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About The Author The author edits a site featuring Grants for Education and another Government Grants site providing info on every grant the federal government offers. Michael Saunders has an MBA from the Stanford Graduate School of Business.

Additional Resources

category - Education Grants

Tribal Colleges Research Grants Program
In keeping with this mission, the National Institutes of Food and Agriculture has recently established the Tribal Colleges Research Grants Program in an attempt to conduct agricultural research studies that address high priority concerns of tribal, national, or multistate significance.

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Government Grants that Help You Pay for College
There are many Title IX programs are used to help put undergraduates that cannot pay for college themselves through school. Many people do not know they can apply for grants such as the Pell Grant, because they assume they do not qualify or are simply unaware of their existence.

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Museum Grants for African American History and Culture Program
The Institute of Museum and Library Services has established a funding opportunity to support the Museum Grants for African American History and Culture Program wherein they intend to provide the African American museum staff with added knowledge and ability in all the areas of management, operations, programming, collections care, and other museum skills.

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The Future Leaders Exchange Program: Host Family and School Placement and Monitoring
The ECA has constituted the Future Leaders Exchange (FLEX) program wherein it seeks to promote mutual understanding between the citizens of the United States of America and the inhabitants of Eurasia by way of sending secondary school students from Eurasia to live in an American community for a full academic year.

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