Student Bank Loans For College

Q: I am beginning to research my financial aid options for college. I have been told that I will most likely need to supplement my FAFSA and federal student loan awards with private student loans for college. When I was looking around for information on private student loans, I came across something called Student Bank Loans for College, could you explain the difference between Student Bank Loans for College and private student loans for college?

A: Student bank loans for college are private student loans for college (also known as alternative loans for college). Until the current student loan bill was approved, banks were also able to offer loans under The Federal Family Education Loan Program (loans that the federal government would guarantee or insure), but as of July 1st banks and private lenders will no longer have the ability to offer loans which the federal government will subsidize. Therefore, any student loan a bank is offering, regardless of what they are titling it, is a private student loan.

As a borrower you need to understand that student bank loans for college, private student loans for college and/or alternative loans for college are all privately funded student loans, which should only be considered second to federal student loans and other sources of financial aid for college. File your FAFSA, apply for relevant scholarships and grants, and speak with the financial aid department at your university or college before considering student bank loans for college, private student loans for college and/or alternative loans for college.