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Financial Education

Guide to Student Loans

Paying for college is expensive. Student loans can help cover costs, but you need to know how they work, how to repay them, and what to do if you struggle with payments.

Types of Student Loans

There are two main kinds of loans: those from the federal government and private ones.

Federal Student Loans

Federal loans are obtained directly from the U.S. government.

  • Set interest rates: Federal laws set the interest rates.
  • No credit checks: Most federal loans do not require a credit check.
  • Flexible repayment: You choose from several plans, including income-based options.
  • Loan types: You can get subsidized or unsubsidized loans.

To learn more, visit studentaid.gov.

Private Student Loans

Private loans are provided by banks, credit unions, and other private lenders.

  • Credit requirements: Rates and terms depend entirely on your credit score.
  • Co-signers: Lenders may require a co-signer.
  • Contract rules: Repayment options depend strictly on your specific loan contract.

To get a private loan, you apply directly with a lender. The lender checks your credit, income, and financial history.

Repaying Your Loans

Repaying Federal Loans

You typically begin to pay back federal loans six months after you graduate, leave school, or reduce your enrollment to below half-time status.

  • The standard repayment plan lasts 10 years.
  • You can switch to an income-based plan at any time for free.
  • Visit studentaid.gov for more details.

Repaying Private Loans

Private loan rules differ by lender.

  • Some lenders require payments while you attend school.
  • Other lenders wait until you finish school.
  • Read your loan contract carefully to understand your rules.

If You Cannot Afford Your Payments

Act as early as possible and contact your loan servicer before you miss a payment. You have the most options if you haven't missed a payment.

Federal Loan Options

The federal government may offer options such as:

  • Income-driven plans: Lower your monthly payments based on your income.
  • Deferment and forbearance: Pause your payments temporarily.
  • Learn more at studentaid.gov.

Private Loan Options

You will need to contact your student loan servicer if you cannot make a payment.

  • Ask your lender about hardship programs or reduced payments.
  • Request a temporary payment suspension.
  • Get every agreement in writing.

Student Loan Help in Washington State

If you face problems with your student loan, here is how to find help in Washington state.

  • The Student Loan Advocate: Washington's Student Loan Advocate helps borrowers at no cost through the Washington Student Achievement Council.
  • File a Complaint: You can submit a complaint directly to us at DFI if you experience unfair treatment.

Helpful Resources