What is the difference between a federal and private student loan?

A federal student loan is issued by the Department of Education and is funded and regulated by the federal government. These loans offer fixed interest rates and flexible repayment options, including income-driven plans and loan forgiveness programs. They do not require a credit check or a co-signer, making them accessible for students with little or no credit history. On the other hand, private student loans come from banks, credit unions, or other financial institutions. They typically have variable interest rates and fewer repayment options. Creditworthiness is often a factor in determining eligibility, and a co-signer may be required. Private loans can have higher interest rates and less borrower protection compared to federal loans. It is recommended to exhaust federal loan options first, maximizing grants and scholarships before considering private loans.