Q: There seem to be more lenders like US Bank and Well’s Fargo, that are now offering private student loans with a fixed interest rate. What would be the major differences between private student loans with a fixed interest rate and federal student loans (which also have the fixed interest rate), if any?

A: Lenders such as US Bank and Well’s Fargo have started to offer private student loans with a fixed interest rate; however, there are still large differences between federal student loans and private student loans (with or without a fixed interest rate).

First, the fixed interest rate private student loans that are offered by most private lenders still carry a higher fixed interest rate than most federal student loans. Second, while most federal student loans are based on a borrowers financial need, private student loans (regardless of fixed or variable interest rate) are based on a borrowers credit. If

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  - Chase, one of the nation’s largest lenders, is quietly offering some homeowners a deal they think is too good to be true.The lender is giving borrowers behind on their mortgage payments $10,000 to $20,000 if they’ll agree to a short sale, which means they sell the home for less than they owe on the mortgage.

Most banks figure theyre doing homeowners a favor simply by agreeing to a short sale and forgiving the amount they owe. But in some cases, Chase borrowers are getting that and cash.

Getting into a worrying amount of debt is, sadly, part and parcel of getting an advanced education for many people these days. Rocketing student fees has meant that those wishing to go to university and better their educations have to resign themselves to the fact that they will be paying off debt for many years after leaving university.

However, previously students were able to justify being in debt for years after leaving university by the fact that they would be able to get a good, well paid job after leaving university, which would effectively help them to repay their student debt. In the current climate many students do not have the luxury of being able to count on a good, well paid job despite the fact that they may have a degree.

For many people that have left university debt has taken over the lives, resulting in their having to put many things on hold in order to focus on their debts. Uswitch.com carried out research that showed how almost 60 percent of students had been unable to save money because of their debts.

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Q: After I have received federal student loans, how much money will I be allowed to take out in private student loans? If a student did not receive much from federal student loans and FAFSA, does this mean that a student will not receive much money from private student loans as well?

A: Federal student loans and private student loans, although both education-based loans, have many differences. Federal student loans are the largest source of college education loans, and should always be considered first (after scholarships and grants have been exhausted), before applying for private student loans. Federal student loans typically offer the best interest rates, terms, and repayment options when compared to most private student loans.

Federal student loans are based on a borrowers financial need, where as private student loans are based on a borrowers credit score/history.

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