As the CFPB points out, private student loans can be a good option, but they represent more risk than federally funded student loans. Private loans have less flexible repayment terms, and if you run into trouble have fewer options on loan modifications or forbearance (meaning suspending your loan until you get back on your feet, financially).
According to data from
Take Charge America strongly advises that students exhaust all other college financing possibilities, including grants and scholarships, before turning to a student loan. Check with your high school counseling office or the financing office of your potential college for some nonstudent loan financial options. Or check out a site such as
Any solid college financing campaign should include the thorough review and completion of the Free Application for Financial Student Assistance. "You may be surprised to learn you're eligible for some funding, even if you or your family are not considered 'low income,'" Take Charge American saysBy and large, if you do turn to student loans, federally backed one such as Perkins and Stafford loans are your best bet. Make sure to check out any fees and repayment timetables, and always know what interest rate you're paying. Be extremely careful about student loans - the Federal Reserve points out that student loan debt recently surpassed credit card debt for the first time in history. Taking on too much in student loans can be a huge burden on a young college graduate starting out in life. Do your due diligence and it to a minimum. --By Brian O'Connell More on college costs: