The Pros & Cons of Private Student Loans

College students are often cautioned to avoid private student loans unless absolutely necessary, urged instead to take advantage of all other financial aid options first.
The advice is sound. Generally speaking, private student loans, which are offered by banks, credit unions, and other private lenders, don't offer the same level of borrower protections and benefits that government student loans do.
As a student, you should seek out grants and scholarships first  money for college that you won't have to repay  before taking on student loan debt. Then, if you're still going to need college loans, you should, in general, make sure you've maximized all your available federal student loans before you consider taking out a private student loan.

Interest Rates & Repayment Options
Federal education loans have fixed interest rates and more flexible repayment terms than private loans. The Department of Education offers income-based repayment options that keep your monthly payments at a figure you can afford, repayment extensions to give you more time to repay, and loan deferments and forbearances that can temporarily postpone your student loan payments if you're facing financial hardship.
If you go to work in the public sector, you may also be eligible for the discharge of some or all of your federal student loan debts.

With private student loans, on the other hand, your interest rate is almost always variable, and private lenders aren't required to provide the kind of repayment flexibility that comes standard on federal college loans.
The current foreclosure crisis that began mushrooming, in part, because of adjustable-rate mortgages should be enough to make anyone leery of adjustable-rate loans on anything.