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Consumer Protection Topics - Student Loans

Student Loans Basics

Going to school can be expensive. Many students and their families use federal or private student loans to help pay for education after high school.

Federal student loans come from the Department of Education. These include:

These loans offer important benefits. For example, if you have a Direct Subsidized Loan, the federal government will pay the interest on the loan while you are in school. In addition, the interest rates on federal loans typically are fixed, meaning you will not be surprised by a potential increase in your loan’s interest rate. Federal loans also allow you to make payments based on your income, defer payments under certain circumstances (such as if you go back to school), and may be forgiven after ten years if you pursue a career in public service.

Private student loans are made by a lender, such as a bank, credit union, or other financial institution. Generally, the lender will consider several factors when reviewing your application for private student loans, including your credit history and whether you have a co-signor. Private loans offer variable interest rates, so the interest rate may rise during the life of the loan. These loans also often have fewer options to reduce or postpone payments and less flexible payment options.

Consumer Protections Available

Many consumer protection laws apply to student loans. Some of these include:


If you are in school or plan to be in school:

If you are out of school:

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