What are the drawbacks of federal and private student loans?
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Federal student loan rates
Congress changes the interest rates on federal loans every , rates went up from 2.75% to 3.73% on direct loans for undergraduates. Rates on direct unsubsidized loans for graduate students went up from 4.3% to 5.28%. And Direct PLUS loan rates went up from 5.3% to 6.28%.
Since federal loans come with fixed interest, you don’t need to worry about paying these rates on loans you already have. The new rates only affect federal loans issued between .
Private student loans
Private student loans are often designed to step in and cover expenses when federal student loans fall short.