Guides / Credit and loans
Student loan basics
Student loans come in two very different types. Knowing which you have decides which repayment options and protections are available to you.
The key ideas
- Federal loans
- Made by the US Department of Education. They come with options like income-driven repayment, deferment and forbearance. Plans and rules change, so always check StudentAid.gov for what is current.
- Private loans
- Made by banks, credit unions and online lenders. Terms vary by lender and usually have fewer hardship options.
- Know your servicer
- Your loan servicer handles billing and repayment plans. Log in to StudentAid.gov to see your federal loans and servicer.
- Refinancing
- Refinancing federal loans into a private loan can lower a rate, but you permanently lose federal protections and programs.
- If you can't pay
- Contact your servicer before you miss payments. Defaulting on federal loans can lead to wage garnishment and seized tax refunds.
Questions to ask yourself
- Which of my loans are federal and which are private?
- Which repayment plans am I eligible for right now?
- Do I qualify for any forgiveness programs through my work?
Free help
- StudentAid.gov
- The official source for federal student loans, repayment plans and your loan details.
- CFPB student loan help
- Guides and complaint options at consumerfinance.gov.
This guide is general education for US households, based on how things typically work. Rules, rates and program details change and vary by lender and state. It is not individual financial, legal or tax advice, and it isn't an offer of credit. Pennies & More isn't paid by any lender or company mentioned here.