Private Loans and the Student Loan Crisis

Most student loans come through government programs. A bank may actually make the loan, but the terms of the loan are set by the government. Once you use up all your available government loans, you can move on to private loans -- but be careful. Private loans do not allow as much flexibility in most cases, and the interest rates can climb without limit. Private loans are a major part of the crisis facing graduating students. The New York Times highlighted the problem over the weekend. It turns out that some students were never even offered government-sponsored loans -- they just went straight to private loans.

Further reading:

• NYT: Private Loans Deepen a Crisis in Student Debt
• Student Loans 101
• Student Loan Consolidation FAQ (Government loans only)