Federal student loans are issued by the government, while private loans are offered by a variety of sources, including credit unions, online lenders, and banks. Federal student loans typically feature lower interest rates than loans offered by private lenders. It’s a good idea to utilize all federal loan money that’s offered to you before applying for private student loans, as federal loans are eligible for financial protections like loan forgiveness programs, forbearance, and income-based repayment plans. Moreover, some federal student loans are subsidized, meaning that the government pays interest while you are still in school. Private student loans are typically unsubsidized loans, meaning that interest starts accruing right away.