{"id":354926,"date":"2016-04-04T11:01:49","date_gmt":"2016-04-04T16:01:49","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/education\/higher-education\/student-loans-legal-information-you-should-know.html"},"modified":"2025-09-08T16:26:39","modified_gmt":"2025-09-08T21:26:39","slug":"student-loans-legal-information-you-should-know","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/education\/higher-education\/student-loans-legal-information-you-should-know.html","title":{"rendered":"Student Loans: Legal Information You Should Know"},"content":{"rendered":"\n
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What To Know Before Getting Student Loans<\/h1>\n\n
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\n By Lyle Therese A. Hilotin-Lee, J.D.<\/a> | Legally reviewed by Jordan Walker, J.D.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Before borrowing student loans, it’s important to understand\u00a0interest rate structures, repayment rights,\u00a0long-term financial obligations, and\u00a0the differences between federal government loans and private education loans. Making\u00a0informed borrowing decisions\u00a0helps\u00a0avoid common pitfalls like high debt burdens or default when it comes to your higher education.<\/i><\/p>\n\n <\/div>\n\n\n\n

Student loan debt affects millions of Americans. According to recent data, the average student loan amount\u00a0per borrower is $39,075. This loan creates a long-term financial obligation for every borrower, so it is important that you make informed decisions. An\u00a0education law attorney<\/a>\u00a0can help you understand your legal protections. They can also explain the potential consequences of successful repayment of student loans and potential default.<\/p>\n

Federal vs. Private Student Loans: Understanding Key Distinctions<\/strong><\/h2>\n

Two primary loan programs exist for educational financial aid: government-sponsored programs and private lending through banks, credit unions, and online financial institutions. Each option offers different advantages and limitations that borrowers should carefully consider.<\/p>\n

FAFSA Requirements and Application Process<\/strong><\/h3>\n

Accessing government educational assistance requires completing the Free Application for\u00a0Federal Student Aid (FAFSA)<\/a>. This application becomes available each October 1st for the subsequent academic year. It collects family financial data to determine eligibility levels and financial need. You should submit your FAFSA promptly, as certain grant programs work on a first-come, first-served basis.<\/p>\n

Private loans do not require the FAFSA. You’ll be required to\u00a0submit the lender’s\u00a0\u00a0application. This application must contain information about your income, credit, and other financial and personal information for you and your cosigner.<\/p>\n

Note that a cosigner is someone who agrees to pay for your loan in case you fail to pay it back. When a loan is cosigned, it is recorded on the borrower’s and cosigner’s credit reports.<\/p>\n

Comparison With Interest Rates<\/strong><\/h3>\n

Federal student loans typically offer more favorable rates than private alternatives. Federal student loan interest rates are fixed for each loan type and academic year\u00a0and don’t\u00a0depend on credit history or income. New rates are set annually for new borrowers.<\/p>\n

For 2025 to 2026<\/a>, the following are the interest rates for student loans:<\/p>\n