Comparing Private Loans and Federal Loans

Private education loans may have significant disadvantages when compared with federal education loans. We strongly encourage you to first borrow any federal loans for which you are eligible. The chart below will help you in understanding the differences between federal and private loan funds.

Comparison Chart of Federal and Private Education Loans

  Federal Loans Private Loans
Credit Check Required? Direct Loan: No
PLUS/Grad PLUS: Yes (limited)
Credit Score or Debt-to-Income considered? Direct Loan: No
Co-Signer Required? Direct Loan: No
Usually no
Usually yes
Deferment Options Several options Depends on lender
Grace Period Direct Loan: 6 months Depends on lender
Interest Rate*

Undergraduate –Direct Loan Subsidized/Unsubsidized: 5.05%
Graduate-Direct Loan Unsubsidized: 6.60%
PLUS/Grad PLUS: 7.60%

Usually variable
Loan Fees** Direct Loan: 1.062%
PLUS: 4.248%
Depends on lender 
Flexible Repayment options Many options available   Generally none
Loan Forgiveness Options Several options available Generally none
Penalties for Early Repayment None Depends on lender 

* Applies to federal loans first disbursed on or after July 1,2018 and before July 1, 2019

** Applies to federal loans first disbursed on or after October 1, 2018 and before October 1, 2019

Choosing a Private Loan

When choosing a private education loan, you should compare the loan terms offered by several lenders in order to choose the best fit for your situation. When choosing a lender, make sure that Walden University is a participating school in their loan program (

Several points that should be researched when considering a private loan:

  • What is the interest rate? Is it fixed or variable? Is the rate capped?
  • What fees must be paid for this loan and when are they paid?
  • How will I receive my loan funds?
  • When does repayment begin and is there a grace period?
  • What will my monthly payment be?
  • What will be the total cost if I use the full repayment period?
  • Are there penalties for early repayment?
  • Are there deferment, forbearance, or cancellation options?

Most private loan programs require the Office of Financial Aid to certify your eligibility before approving your loan. If you receive financial aid, you must notify the Office of Financial Aid of any private loans you borrow, as it may affect your aid eligibility.

Truth in Lending Act

Under the Federal Truth in Lending Act (TILA), your lender must provide you with the following documents:

  • The Private Education Loan Applicant Self-Certification Form must be completed and returned to the lender before receiving your first disbursement of loan funds.
  • Federal Direct Loan Disclosure Statement and Right-to-Cancel Period: After you sign your promissory note, the Federal Direct Loan Disclosure Statement confirms the terms and conditions of your loan. At the time that this disclosure is delivered, your "right-to-cancel" period begins. During this period of three to six days, you may cancel the loan by contacting the lender. The lender cannot release the first disbursement of your loan funds until the end of the right-to-cancel period.

Do you have questions about financial aid? If you haven’t yet applied to Walden, please contact an enrollment advisor at 855-646-5286 in the United States. If you are a current student, please contact a financial aid advisor at or call 1-800-WALDENU (1-800-925-3368).

Man sitting at latop
Questions about paying for your education or limited time savings options?
Questions about paying for your education or limited time savings options?
We're here to help. Talk to your personal enrollment advisor for more information today. Please use our International Form if you live outside of the U.S.
We're here to help. Talk to your personal enrollment advisor for more information today. Please use our Domestic Form if you live in the U.S.
*Required Field
Academic Interests
Contact Information
Invalid email address
Please provide a valid phone number
Please provide a valid zipcode
Additional Information
Get Started

By submitting this form, I understand and agree that Walden University may contact me via email, text, telephone, and prerecorded message regarding furthering my education and that calls may be generated using automated technology. You may opt out at any time. Please view our privacy policy or contact us for more details.


By checking this box, I agree that Walden University may contact me by email, text message, autodialed telephone call, and prerecorded message at the contact information provided above regarding opportunities and offers to further my education. I understand that I may withdraw my consent at any time and that my consent is not a condition of any purchase. I have received the Walden University Privacy Policy