Blueprint may earn a commission from affiliate partner links featured here on our site. This commission does not influence our editors’ opinions or evaluations. Please view our full advertiser disclosure policy.
When it comes to paying for college, it’s essential to explore all your federal aid options first. However, if you still need financial assistance, private student loans can be a helpful solution. This article will guide you through the best private student loans of 2024 and provide useful resources to help you make informed decisions about financing your education.
Best Private Student Loan Lenders of 2024
Top Lenders and Their Specialties:
- Ascent – Best for students with thin credit.
- SoFi – Best for customer experience.
- Citizens – Best bank lender.
- MEFA – Best not-for-profit lender.
- RISLA – Best for a variety of loan options.
- College Ave – Best for flexible repayments.
- Advantage Education Loan – Best for part-time students.
Detailed Overview of Top Picks
Ascent: Best for Thin Credit
Fixed APR: 4.29% to 15.96%
Variable APR: 6.23% to 16.09%
Pros: Accessible for students with limited credit history.
Cons: Higher rates for those without a co-signer.
SoFi: Best for Customer Experience
Fixed APR: 4.19% to 14.83% (with autopay discount)
Variable APR: 5.74% to 14.83% (with autopay discount)
Pros: Excellent customer service and member benefits.
Cons: Requires good credit for the best rates.
Citizens: Best Bank Lender
College Ave: Best for Flexible Repayments
Fixed APR: 4.17% to 16.69%
Variable APR: 5.59% to 16.85%
Pros: Flexible repayment terms.
Cons: Rates can be high without a co-signer.
Advantage Education Loan: Best for Part-Time Students
Fixed APR: 5.19% to 10.94%
Variable APR: N/A
Pros: Tailored for part-time students.
Cons: Higher rates compared to some competitors.
Comparison of Top Lenders
| Lender | Fixed APR | Variable APR | Loan Terms |
|---|---|---|---|
| Ascent | 4.29% to 15.96% | 6.23% to 16.09% | 5, 7, 10, 12, 15 years |
| SoFi | 4.19% to 14.83% | 5.74% to 14.83% | 5, 7, 10, 15 years |
| Citizens | 4.39% to 15.45% | 5.99% to 16.48% | 5, 10, 15 years |
| MEFA | 5.75% to 8.95% | N/A | 10, 15 years |
| RISLA | 4.05% to 8.64% | N/A | 10, 15 years |
| College Ave | 4.17% to 16.69% | 5.59% to 16.85% | 5, 8, 10, 15 years |
| Advantage Education | 5.19% to 10.94% | N/A | 10 years |
Current Student Loan Interest Rates
Federal student loan rates are set by Congress and remain fixed throughout the loan’s term. For the 2023-2024 academic year, the rates are:
| Federal Loan Type | Borrower Type | Fixed Interest Rate |
|---|---|---|
| Direct Subsidized Loan | Undergraduate | 5.50% |
| Direct Unsubsidized Loan | Undergraduate | 5.50% |
| Direct Unsubsidized Loan | Graduate or professional | 7.05% |
| Direct PLUS Loan | Graduate or professional | 8.05% |
Average Student Loan Debt in the U.S.
As of the fourth quarter of 2023, the total student loan debt in the U.S. reached approximately $1.73 trillion. Over half of bachelor’s degree students (51%) graduating in the 2021-2022 academic year carried education debt, averaging $29,400 per borrower.
Federal Student Loan Debt
The bulk of student loan debt, about $1.6 trillion, is in federal loans spread across 43.2 million borrowers. Average debt for public school graduates is $20,700, while private school graduates average $22,200.
Private Student Loan Debt
Private loan borrowing is less common. Only 9% of public college and 13% of private college graduates took out private loans, with average debts of $34,600 and $44,600, respectively.
How to Qualify for a Student Loan
Federal Student Loans
To qualify for federal student loans, you must:
- Be a U.S. citizen or qualifying non-citizen.
- Show academic qualification (high school diploma, GED, etc.).
- Attend a school participating in the federal aid program.
- Be enrolled in an eligible degree or certificate program.
- Maintain satisfactory academic progress.
- Show financial need for need-based programs.
Private Student Loans
Eligibility criteria for private student loans typically include:
- Good credit (usually a score of 670 or higher).
- Verifiable income.
- Low debt-to-income (DTI) ratio.
If you don’t meet these criteria, applying with a co-signer can increase your chances. Nearly 91% of private loans are co-signed.
How to Apply for Student Loans
Applying for Federal Student Loans
- Submit the FAFSA: Fill out the Free Application for Federal Student Aid (FAFSA) at StudentAid.gov.
- Review Your Award Letter: Check the financial aid award letter from your school.
- Choose Your Aid: Decide which types of aid to accept, prioritizing grants and scholarships over loans.
Deadline Tip: FAFSA applications open on October 1 and close on June 30 of the academic year. Some aid is first-come, first-served, so apply early.
Applying for Private Student Loans
- Determine Your Need: Calculate how much you need to borrow.
- Compare Lenders: Shop around to find the best rates and terms.
- Get Pre-Qualified: Check eligibility without affecting your credit score.
- Complete an Application: Fill out a full application, agreeing to a hard credit inquiry.
- Receive Funds: Funds are sent to your school, with any remaining amount issued to you.
Tip: Exhaust federal aid and scholarships before turning to private loans.
Who to Contact for Student Loan Questions
- Financial Aid Office: Your college’s financial aid administrators.
- Financial Advisor: For personalized financial planning.
- Credit Counselor: For advice on improving credit and managing debt.
- Lender or Loan Servicer: For specific questions about existing loans.
Pros and Cons of Student Loans
Pros
- Cover Education Costs: Loans make education accessible.
- Borrower Protections: Federal loans offer repayment options and forgiveness programs.
- Availability: Federal loans are accessible to most students.
Cons
- Interest and Fees: Loans can be expensive over time.
- Consequences of Missed Payments: Defaulting affects credit and can lead to wage garnishment.
- Co-Signer Risks: Co-signers are liable if the borrower defaults.
Alternatives to Private Loans
- Federal Student Loans: Generally better terms and protections.
- Grants: Need-based federal grants like the Pell Grant.
- Scholarships: Search engines like Fastweb and Scholarships.com.
- Work-Study: Part-time jobs related to your field of study.
- Part-Time Job: Earn money to reduce loan needs.
- Savings: Use personal or family savings, such as a 529 plan.
Choosing the Best Private Student Loans
To find the best loan for you, consider:
- APR: The total cost of borrowing, including interest and fees.
- Loan Amounts: Ensure the lender can cover your expenses.
- Repayment Terms: Choose a term that balances monthly payments and interest costs.
- Repayment Options: Look for flexible repayment plans.
- Fees: Be aware of any additional costs.
- Eligibility: Check if you meet the lender’s criteria or need a co-signer.
By carefully comparing your options and understanding the details, you can make an informed decision about financing your education