One reason a student may seek a federal student loan instead of a private student loan is that:

A. Private loans carry a higher interest rate than federal loans.

B. Federal loans are obtained by banks, while private loans are backed by the government.

C. Federal loans must be paid back more quickly than private loans.

D. Private loans are only available to parents, while federal loans may be issued to the student.

Answer

The correct answer is A. Private loans carry a higher interest rate than federal loans.

Explatation

Federal student loans typically offer lower interest rates compared to private student loans, making them a more affordable option for students borrowing for their education. Additionally, federal loans come with certain benefits such as flexible repayment options, income-driven repayment plans, and potential loan forgiveness programs that are generally not available with private loans.

Option B is incorrect because federal loans are not obtained by banks; they are funded directly by the federal government. Option C is also incorrect; federal loans often have longer repayment periods compared to many private loans. Option D is misleading; while certain federal loans like PLUS loans can be taken by parents for dependent students, federal loans are indeed available to students themselves, so this statement is not entirely accurate.

Overall, students typically seek federal loans primarily because they tend to have lower interest rates and favorable repayment conditions.