With upcoming changes to federal student loan limits, families may find they need to explore additional college funding options. When federal aid isn’t enough to cover the full cost of college, private student loans can help fill the gap. But over the last few years the market has evolved—with more lenders and more options than ever before.
The right student loan can give your family peace of mind. The wrong one can lead to stress, surprises, or long-term financial strain. Here’s what you need to know.
Know Your Lender Types: Not All Private Loans Are Alike
Before choosing a loan, it’s important to understand how different types of lenders operate, and how their loan terms can affect your family:
- Major Banks
Offer fast approvals and robust online tools. But their rates often showcase impossibly low teaser rates, and service that is less personal. - Online & Fintech Lenders
Known for speed and innovation. Some offer perks like credit-building programs or rewards for graduation. But interest rates and terms can vary significantly depending on credit score, school, and cosigner. Like major banks, they are well known for showcasing “as low as” rates that the majority of applicants will never receive. - Credit Unions
Member-owned and mission-driven, credit unions offer competitive rates and more personalized service. Many also offer an education line of credit, which lets you borrow only what you need, when you need it*—term by term.
Ask These Questions Before Borrowing
Before you sign, make sure the loan is built for real college life—not just the first semester.
- Can we borrow gradually over time—or will we have to take everything upfront?
Many private loans require you to take a large lump sum that starts accruing interest immediately. A flexible line of credit lets you draw funds semester by semester, reducing unnecessary debt and giving you more control. - Will this lender support us across all four years—or only at the start?
Some lenders shine during the application process, then disappear. Look for lenders who offer ongoing support, or multi-year borrowing without the hassle of reapplying annually. - Is this loan designed for families—or just for individuals?
If you’re co-borrowing, make sure both parties have equal visibility, clear access to account management, and shared tools to track progress, request draws, or plan for repayment.
Tips to Borrow Smarter in 2026
- Shop around, not just on rates. Consider customer service, repayment flexibility, and the loan structure.
- Avoid borrowing too much too early. Lines of credit let you draw funds when needed, helping reduce debt and interest.
- Talk openly about expectations for borrowing and cosigning. Everyone involved should understand repayment terms, responsibilities, and what to do if income or plans change.
A Final Thought: One Size Doesn’t Fit All
Families who explore all the options—federal loans, private lenders, and credit union programs are better positioned to make smart, sustainable borrowing decisions. Don’t assume one lender is best for everyone. Instead, ask: What option fits our path, our financial situation, and our need for flexibility?
If you’re ready to compare private student loan options, use our finder tool to browse competitive offers from participating credit unions that prioritize people over profits.
*Subject to annual review and credit qualification. Must meet school’s Satisfactory Academic Progress (SAP) requirements.
