PRIVATE STUDENT LOANS vs FEDERAL STUDENT LOANS

Federal student loans and private student loans are two different ways to finance your education. You should compare the benefits of each to find the best college loans for you.*

The difference between private student loans and federal student loans

Federal student loans, such as Stafford and PLUS loans, usually have lower interest rates than private student loans and may include government-subsidized interest payments during qualifying periods of enrollment and deferment. Federal student loans have standard rates and fees that don't vary by lender, though borrower benefits may. Chase provides funds for federal student loans but also offers private student loans. Private student loans are designed to supplement federal loans when federal loans aren't enough to cover the entire cost of your education.

Federal student loans

The first loans for college you should explore, after you’ve applied for grants and scholarships, are federal loan options like Stafford and Grad PLUS loans. Federal student loans are the largest source of student loans in the country.

Features Include:

• Low interest rates
• Interest may be paid by the federal government while you're in school, if eligible
• Flexible repayment options, including consolidation

In order to qualify for a federal loan, you must fill out the Free Application for Federal Student Aid (FAFSA). Federal loans are long-term loans with low interest rates designed exclusively for students who need money to meet the costs associated with education.

Private student loans

Private student loans can be used to cover a variety of education expenses. If you don’t qualify for enough federal loans for college to cover your expenses, a private student loan may be your next best option.*

Features Include:

• Competitive interest rates
• No federal financial aid forms required
• Repayment that can begin after graduation
• Cosigner release option

A cosigner may help you qualify for a private student loan if you don’t qualify on your own. Even if you do qualify on your own, a qualified cosigner may help you get a better interest rate. The rates and fees for private student loans are determined by the lender and often depend on your credit rating and the credit rating of your cosigner (if applicable).

Consolidate your student loans

All of your federal student loans can be consolidated into a federal consolidation loan and all of your private student loans can be consolidated into a Chase Private Consolidation Loan. This means that after consolidating your federal and private loans separately, you’ll only have two loan payments each month.

*Important Information: As students determine the best way to finance their education, they should consider the full range of student financial aid options available. Private loans, like the Chase Select Private Student Loan, can be used when federal loans, grants and other forms of financial aid are not sufficient to cover the full cost of education.

Chase Select loans are subject to credit approval, receipt of a completed and signed Application/Promissory Note, verification of application information and school certification of student’s enrollment at a participating school.

Chase services its Chase Select loans and does not sell them to another lender.

Upon request by the primary borrower, cosigners are eligible to be released from the loan after any 36 consecutive payments of principal and interest are paid on time. The borrower must meet credit criteria at the time of cosigner release. Other terms and conditions apply. Benefit programs are subject to change.

To qualify for the cosigner discount, the borrower must be approved with a cosigner who meets established credit criteria. Some borrowers may be approved with a cosigner who does not meet this standard and therefore will not receive the discount.

Repayment plans vary with enrollment status and loan type. Call for details.

This information was current as of 11/01/2008.