What is the difference between a Stafford student loan and a Private student loan?
Stafford students loans are federal loans while private student loans are not. There are two types of Stafford loans: Direct and FFELP. Direct loans are when the money comes directly from the US Department of Education. FFELP loans on the other hand come from private lenders, but are federally guaranteed by the government (meaning that if you default on the loan, the lender is still guaranteed to be repaid by the federal government, therefore transferring your debt to the US Department of Education Debt Collections). The hugest difference in federal Stafford loans and private loans is the interest rate and repayment terms. Stafford loans have an interest rate of 6.8% fixed over the life of the loan. Furthermore, if you have financial need and qualify for a subsidized loan, that interest will not accrue until you actually enter repayment (6 months after graduating or dropping to less than halftime enrollment). Also, because the loans are federally guaranteed to the lender, there is no c
