Student loan types: Understanding different types of student loan
Student Loan Types: At-a-Glance Comparison
FEDERAL STUDENT LOANS
Icons: 
(Government Shield) + 
(Graduation Cap)
1. Direct Subsidized Loans
For: Undergrads with financial need
Interest: Govt pays while in school (4.99% fixed)
Max: $5,500-$12,500/year
2. Direct Unsubsidized Loans
For: All students (no need required)
Interest: Starts immediately (4.99% undergrad / 6.54% grad)
Max: $20,500/year (grad)
3. Direct PLUS Loans
For: Parents/Grad Students
Credit Check: Yes (7.54% fixed)
Risk: No borrowing cap – borrow responsibly!
Federal Perks:
- Loan forgiveness programs
- Income-driven repayment
- No payments until graduation
PRIVATE STUDENT LOANS
Icons: 
(Bank) + (Warning Sign)
Key Features:
- Rates: 3%-14% (variable/fixed)
Credit Check: Required (cosigners common)
Repayment: Often starts immediately
When to Use:
Federal loans maxed out
Non-accredited programs
Need fast cash (minimal paperwork)
Risks:
- No forgiveness options
- Rigid repayment terms
- Rates can spike (variable loans)
KEY COMPARISON
(Side-by-side table)
| Feature | Federal Loans | Private Loans |
|---|---|---|
| Interest Rates | 4.99%-7.54% (Fixed) | 3%-14% (Variable/Fixed) |
| Credit Check | Only for PLUS | Always Required |
| Cosigner Needed? | Rarely | Usually |
| Repayment Start | After graduation | Often immediate |
WHY CHOOSE FEDERAL?
Lower fixed rates No credit history required Bankruptcy protection Death/disability discharge
(Visual: Green checkmarks vs. Red X’s for private loans)
PRO TIPS
- Max federal loans first
- Use StudentAid.gov loan simulator
- Avoid private loans for undergrad degrees
(Footer)
Source: U.S. Department of Education, 2023 rates