Federal vs private student loans.

In plain English

Federal student loans are made by the U.S. Department of Education and applied for with the FAFSA. They carry fixed interest rates set by law, don't require a credit check for most undergraduate loans, and come with protections like income-driven repayment, deferment, and forgiveness paths. Private student loans come from banks, credit unions, or online lenders. Their interest rate, which can be fixed or variable, depends on your credit (and often a cosigner's credit), and they generally lack the federal repayment and forgiveness options. The standard guidance is to use federal aid first and treat private loans as a last resort for any gap that remains.

01Why it matters

If you lose your job, federal loans can pause or shrink your payments. A private loan usually can't, so the same dollar borrowed carries very different risk depending on the source.

02The math, step by step

You're $8,000 short for the year. A federal unsubsidized loan would give you a fixed rate set by law plus access to income-driven repayment if money gets tight later. A private loan might offer a lower teaser rate if your cosigner has strong credit, but if you lose income, there's usually no income-driven plan to fall back on.

03What this is NOT

04Receipts

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