 TITLE: How to Find the Best Private Student Loan for Your Needs CONTENT: Differences Between Federal and Private Student Loans\n-----------------------------------------------------\nAlthough federal student loans and private student loans are for your education, they work in different ways.\nThe U.S. Department of Education issues direct loans, and the interest rates and terms are set by law. Qualification is not contingent on your credit history or credit scores. If you demonstrate economic need, you may receive a _subsidized loan_, which means the government will pay the interest on the loan while you are enrolled at least half-time in school, during a grace period or if you've deferred the loan. With an _unsubsidized loan_, interest will accrue during all periods. Federal student loans come with various repayment options, and interest rates are low and fixed.\nPrivate student loans, on the other hand, are offered by financial institutions including banks, credit unions and lenders that specialize in student loans, such as Sallie Mae. Private lenders consider your creditworthiness when deciding whether to offer you a loan and what your interest rate and terms will be. These lenders determine their own interest rates, which may be fixed or variable, as well as repayment terms and other benefits.\nEven if you can score a low-rate private student loan, tapping out what you can get from the government first is wise. Federal loans have undeniable benefits, such as long and flexible repayment periods, the ability to defer or forbear payments, and payment options that are based on your income and expenses. END