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Federal vs. Private Student Loans

With so many borrowing options available to parents and students, it’s easy to be confused about the best way to finance a college education. Among the more commonly used options are federal student loans and private student loans. The chart below is designed to help you understand the differences that exist between student loan types. SunTrust recommends students exhaust all aid alternatives including grants, scholarships and federal loans prior to applying for private loans.

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Federal Direct Loans¹

(Subsidized/Unsubsidized)

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Federal Direct PLUS Loans¹

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Private Student Loans

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Table Comparison
	Federal Direct Loans¹ (Subsidized/Unsubsidized)	Federal Direct PLUS Loans¹	Private Student Loans

Interest Rate	Rates are typically fixed and are set annually by the U.S. Department of Education² Rates may be lower than interest rates for private student loans	Rates are typically fixed and are set annually by the U.S. Department of Education² Rates may be lower than interest rates for private student loans	Rates may be variable or fixed, are based on credit history and vary by lender/loan program Based on an applicant's credit, rates may be lower than interest rates for federal student loans
Borrower	Student is the primary borrower and responsible for repayment	Parent is responsible for Parent PLUS repayment Graduate or professional student is responsible for Grad PLUS repayment	Student and cosigner, if applicable, are responsible for repayment
Credit Review	No debt-to-income analysis or credit check performed	No debt-to-income analysis performed, but a credit report is reviewed	Comprehensive credit approval process
Loan Limits	Annual and aggregate limits set by the federal government are based on grade level and dependency status	May borrow up to the cost of attendance minus financial aid received	Borrowing limits vary by lender, loan program and by cost of attendance
Repayment	Generally, you are not required to make payments while in school Begins 6 months after graduation, withdrawal from school, or dropping below half-time Generally, from 10 to 25 years to repay, depending on the repayment plan chosen	Generally, you are not required to make payments while in school Begins within 60 days of final disbursement Generally, from 10 to 25 years to repay, depending on the repayment plan chosen	Generally, you are not required to make payments while in school Generally begins 6 months after graduation, withdrawal from school, or dropping below half-time Repayment terms vary by lender
Deferment	Multiple deferment options available³	Multiple deferment options available³	Deferment options vary by lender and loan program⁴
Forbearance	Multiple forbearance options available³, but federal student loans typically offer forbearance intervals of up to 12 months at a time for up to a total of three years	Multiple forbearance options available³, but federal student loans typically offer forbearance intervals of up to 12 months at a time for up to a total of three years	Forbearance options vary by lender and loan program⁴
Death/Disability Forgiveness	Loan forgiveness in the event of death or disability	Loan forgiveness in the event of death or disability	Several lenders offer loan forgiveness in the case of student death or disability

Table Comparison
Federal Direct Loans¹ (Subsidized/Unsubsidized)	Federal Direct PLUS Loans¹	Private Student Loans

Interest Rate
Rates are typically fixed and are set annually by the U.S. Department of Education² Rates may be lower than interest rates for private student loans	Rates are typically fixed and are set annually by the U.S. Department of Education² Rates may be lower than interest rates for private student loans	Rates may be variable or fixed, are based on credit history and vary by lender/loan program Based on an applicant's credit, rates may be lower than interest rates for federal student loans
Borrower
Student is the primary borrower and responsible for repayment	Parent is responsible for Parent PLUS repayment Graduate or professional student is responsible for Grad PLUS repayment	Student and cosigner, if applicable, are responsible for repayment
Credit Review
No debt-to-income analysis or credit check performed	No debt-to-income analysis performed, but a credit report is reviewed	Comprehensive credit approval process
Loan Limits
Annual and aggregate limits set by the federal government are based on grade level and dependency status	May borrow up to the cost of attendance minus financial aid received	Borrowing limits vary by lender, loan program and by cost of attendance
Repayment
Generally, you are not required to make payments while in school Begins 6 months after graduation, withdrawal from school, or dropping below half-time Generally, from 10 to 25 years to repay, depending on the repayment plan chosen	Generally, you are not required to make payments while in school Begins within 60 days of final disbursement Generally, from 10 to 25 years to repay, depending on the repayment plan chosen	Generally, you are not required to make payments while in school Generally begins 6 months after graduation, withdrawal from school, or dropping below half-time Repayment terms vary by lender
Deferment
Multiple deferment options available³	Multiple deferment options available³	Deferment options vary by lender and loan program⁴
Forbearance
Multiple forbearance options available³, but federal student loans typically offer forbearance intervals of up to 12 months at a time for up to a total of three years	Multiple forbearance options available³, but federal student loans typically offer forbearance intervals of up to 12 months at a time for up to a total of three years	Forbearance options vary by lender and loan program⁴
Death/Disability Forgiveness
Loan forgiveness in the event of death or disability	Loan forgiveness in the event of death or disability	Several lenders offer loan forgiveness in the case of student death or disability

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About Student Loans

Important Information

Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. View and compare the available features of SunTrust private student loans.

¹Effective July 1, 2010, Federal Education Loans are only available directly from the U.S. Department of Education.

² For current federal loan interest rates, visit studentaid.ed.gov or contact your school’s financial aid office.

³ Interest will continue to accrue during periods of deferment or forbearance, and it will be capitalized (added to the principal loan balance) at the end of each deferment or forbearance period.

⁴ Interest will continue to accrue during periods of deferment or forbearance. Interest capitalization policies may vary by lender.

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For more details about Wire Transfers with SunTrust, call 800.947.3786.

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For domestic incoming wires, use Routing ABA: 061000104
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SunTrust incoming wire instructions are also available by calling 800.947.3786 - option 1

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Services provided by the following affiliates of Truist Financial Corporation: Banking products and services, including loans and deposit accounts, are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank, and SunTrust Delaware Trust Company. Securities, brokerage accounts and /or insurance (including annuities) are offered by SunTrust Investment Services, Inc. and BB&T Securities, LLC, P.J. Robb Variable Corp., and Precept Advisory Group, LLC, which are SEC registered broker-dealers, members FINRALink opens a new window, SIPCLink opens a new window, and a licensed insurance agency where applicable. Investment advisory services are offered by SunTrust Advisory Services, Inc., GFO Advisory Services, LLC, BB&T Securities, LLC, Sterling Capital Management, LLC, and BB&T Institutional Investment Advisors, Inc., each SEC registered investment advisers. BB&T Sterling Advisors, BB&T Investments and BB&T Scott & Stringfellow, are divisions of BB&T Securities, LLC. Mutual fund products are advised by Sterling Capital Management, LLC. Mortgage products and services are offered through SunTrust Mortgage, a tradename for SunTrust Bank now Truist Bank.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of Truist Financial Corporation: SunTrust Bank now Truist Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRALink opens a new window and SIPCLink opens a new window, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

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SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRALink opens a new window and SIPCLink opens a new window.

Thank you for choosing SunTrust now Truist. We welcome the opportunity to serve your financial needs. While SunTrust and BB&T have merged to become Truist, both institutions will continue to offer independent product lines for a period of time. This may include differing underwriting guidelines, product features, terms, fees, and pricing.

Our friendly teammates at your local BB&T branches will be happy to walk you through their products. You can also learn more by contacting them at 1-800-BANK-BBT or BBT.com.

Federal vs. Private Student Loans

Federal Direct Loans1

Federal Direct PLUS Loans1

Private Student Loans

Federal Direct Loans1

Federal Direct PLUS Loans1

Private Student Loans

Federal Direct Loans1

Federal Direct PLUS Loans1

Private Student Loans

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Federal Direct Loans¹

Federal Direct PLUS Loans¹

Federal Direct Loans¹

Federal Direct PLUS Loans¹

Federal Direct Loans¹

Federal Direct PLUS Loans¹