Private Education Loans
Private education loans, also known as alternative or supplemental loans, are credit-based loans offered by lending institutions. Private education loans help meet the costs that traditional financial aid programs do not cover. Usually, private education loans help fill the gap between the cost of education, less any financial aid received. Private education loans are the fastest growing source of financial aid and there are many different loan programs offered. Families need to compare the PLUS loan to a private education loan and decide which best meets their needs.

It may help to think of private education loans like consumer loans for education. Each lending institution offers different types of programs to meet the needs of students and parents. Interest rates, repayment periods, loan fees, credit criteria, borrower benefit programs, etcetera, will vary from lender to lender. Determining which loan program to use will involve some research.

Start your search with a visit to the college financial aid office. Make sure that you have exhausted all opportunities for financial aid, scholarships, and student employment. Next, ask the financial aid office if they have recommendations or a preferred lender list for private education loans. In addition, check to see if your state offers a private education loan program. These programs are backed by state bond issues and may offer more attractive loan terms.

Based on the information you receive, assemble the loan information and complete our education loan comparison worksheet. Taking the time to complete this worksheet can help give you a side by side comparison of the programs and could save you money when it comes time to repay your loan. Since the PLUS loan is the standard on which other loan programs should be judged, we've taken the first step in completing the worksheet by filling in the general information regarding the PLUS loan.