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Home Private Student Loans Student Loans Private Student Loans vs Direct Loans

Private Student Loans vs Direct Stafford Loans

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By Edvisors Network
June 18, 2018
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Direct Loans, sometimes called Stafford Loans, are federally-funded, fixed-rate student loans available to undergraduate and graduate students. Direct Loans, which can have subsidized or unsubsidized interest, are among the least expensive loans available to students who need to borrow money for college.

When your financial aid package falls short of your needs, you may want to consider supplementing your federal student loans with a private student loan.

  Private Student Loans Direct Subsidized and Unsubsidized Loans
Lender Bank, credit union, financial institution, state agency, or college/university U.S. Department of Education
FAFSA Required? No Yes
Loan Limits Full cost of attendance minus other financial aid received Subject to annual and lifetime loan limits
Interest Rates
  • Fixed and variable options available
  • Rate based on credit-worthiness of borrower and cosigner
  • Undergraduate: Fixed at 4.53% (applicable on or after 7/1/2019 and before 7/1/2020)
  • Graduate/Professional: Fixed at 6.08% (applicable on or after 7/1/2019 and before 7/1/2020)
Cosigner Required? Yes, unless borrower has a strong credit history No
Loan Fees Typically 0% to 5%, depending on lender and borrower credit 1.059% (October 1, 2019 - September 30, 2020)
Repayment Plans Vary by lender Many options available, including plans based on income
Suspending Repayment Typically 1 year of forbearance, depending on lender 3 years of deferment and 3 years of forbearance available, if eligibility requirements are met
Cancelling Repayment Very limited options Multiple forgiveness and discharge options available

annual loan limits numbers version

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Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans. Loan offers from participating lenders that appear on our websites are not affiliated with any college and/or universities, and there are no colleges and/or universities which endorse Edvisors’ products or services. Lender search results do not constitute an official college preferred lender list. Edvisors receives compensation from lenders that appear on this site. This compensation may impact the placement of where lenders appear on this site, for example, the order in which the lenders appear when included in a list. Not all lenders participate in our sites and lenders that do participate may not offer loans to every school.

Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid. Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with your school or lender directly for information related to your personal eligibility.

Edvisors has endeavored to provide accurate information. However, the results provided by lenders are for illustrative purposes only and accuracy is not guaranteed, as such, Edvisors assumes no responsibility for errors or omission in the information provided.

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