Types of Student Debt
How do I know what kind of loans I have?
If you apply for financial aid, your school will likely include student loans as part of your financial aid package. It’s important to understand what types of loans you are offered. Generally, there are two types of student loans—federal and private.
- Federal student loans and federal parent loans: These loans are funded by the federal government.
- Private student loans: These loans are non federal loans, made by a lender such as a bank, credit union, state agency, or a school.
Learn about the differences: https://studentaid.gov/understand-aid/types/loans/federal-vs-private
Understand What Makes Student Loans Unique
Federal Student Loans
Federal student loans are the most commonly offered student loans, and are all owned by the Department of Education. The Department of Education contracts with federal student loan servicers to provide the management of federal student loans.
Today, the government only issues Direct Loans, such as the below:
- Direct Loans, Subsidized or Unsubsidized
- Direct Graduate PLUS Loans
- Direct Consolidation Loans
- Direct Parent PLUS Loans
In the past, other types of loans were offered, and these loans are still considered federal loans as they are still owned by the US Government. They include:
Private Student Loans
With private student loans held by a private lender and not the federal government, managing repayment will depend on your lender and loan agreement.