The differences between private & federal student loans
We’ve all been hearing a lot about federal student loan interest rate reform in the news recently, but what about private student loans? These loans usually carry even higher interest rates than federal loans and are not eligible for repayment programs like deferment, forbearance, or student loan forgiveness.
Student debt is a huge issue, and borrowers with private student loans get the worst of it. Check out the chart below from the Center for Responsible Lending comparing federal and private student loans, and read more about the differences on our blog.
*Short-term negotiated repayment (forbearance): The Office of the Comptroller of the Currency does allow banks to offer forbearance in 2-3 month increments if they have a reasonable belief the borrower will be in position to make payments at that point. Thanks for Craig P. Anderson of Common Sense Student Loans for the information.
Private student loan forbearance policies vary by lender–read your loan contract very carefully or ask your lender about your options if you’re having trouble paying your student loans.