There are basically two major kinds of loans that are available for college students; these are the private student loans and the government loans.

Federal Student Loans

Federal loans are initially under the management of the Government Student Aid programs. These aid programs actually are mainly in the form of student grants, work-study programs and loans. Stafford loans are one of the most common types of federal student loans. Other types of federal loans are in the form of military plans.

Private College Loans

Private loans are under the management of financial institutions and establishments, such as the Sallie Mae student loans and also that of the Citibank type. Such credit providers are supporters of unsecured loans to college students. They are likewise authorized to charge high rates of interest.

You can acquire both types – at the same time

You can have both federal and private loans in order to fully finance your college studies. But then of course, it is advisable to exhaust all means to acquire the federal type as they have a much lower interest rate. Then, you can further complement your acquired federal aid with private loans. This is the reason why the latter is often called the alternative loans.

Consolidate Separately

Student debt loan consolidation is done when the borrower is burdened too much with so many acquired loans. The process makes repayment easier and more manageable for the student. However, there is what we call a federal student loan consolidation and the private version – they are both merged separately as two groups. Again, federal debts are consolidated as one distinct group because they have a lower rate of interest, which the borrower will not be able to take advantage of when both federal and private loans are attempted to be consolidated to together.