Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

Full Bio →

Written by Sara Routhier
Director of Outreach Sara Routhier

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jan 13, 2012

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

When the government doesn’t provide student loans to an applicant, or when the federally-backed loans aren’t enough to satisfy the high costs associated with college today, private student loans are available. A private student loan refer to a type of financing available to students pursuing a higher education at an approved university or institution.

[loansform]Since private student loans are administered by private corporations or investors, they typically carry higher percentage rates than federal forms of financing. As a result, students should use this kind of financing as a supplement to government-backed loans. In addition to using a private loan as a supplement, students should also apply for certain scholarships and grants to help fund their education.

Students can receive some breaks though, as lenders realize their interest rates are high—particularly for a portion of society who is likely unemployed, as pupils often don’t have time to work while studying. As a result, many lenders offer certain breaks, discounts, or bonuses to students who demonstrate consistent and on-time payments.

Interest rate deductions may also be acquired if a pupil provides a co-signer.

Most private student loans are backed by the financial services company called Sallie Mae. Sallie Mae was originally a government-sponsored entity that was established in 1972, but as of 1997, the company began privatizing its services. Since its creation, it has backed more than 31 million students with loans.