Student Loans
The two main categories of student loans are federal and private loans. Federal loans are a better deal and should almost always be pursued first. Private loans cost more and offer fewer repayment options, but the lender is more limited in collecting a defaulted loan. Neither type of student loan is automatically wiped out in bankruptcy, although in extreme circumstances it may be possible to obtain a bankruptcy discharge of a student loan debt.
Federal Loans
- No co-signers
- Lower interest rates
- Better repayment options
- Available without consideration of credit
(except for PLUS loans—parents or grad students)
BUT—there is no statute of limitations for collecting the loan; may be collected through wage garnishment and tax intercepts.
Private Loans
- Have higher interest rates
- Look at your credit record
- Offer worse repayment options
BUT they are subject to statute of limitations (4 years in PA unless “under seal”); no wage garnishments in PA for student loans.
There are many excellent sources of information:
- National Consumer Law Center
- Consumer Financial Protection Bureau
- National Student Loan Data System
(if loan is listed here, it is federal. If not, it is probably private) - Info. about federal repayment/forgiveness
- http://www.studentaid.gov
- http://www.studentloans.gov
- http://www.bostonstudentloanlawyer.com
- https://studentloanify.com/