"Federal student loans carry low interest, can be placed into deferment for a number of years, may be repaid on an income-sensitive basis, and will be forgiven if not repaid after 25 years. If grad school is part of your business investment, a federal student loan is like an awesome small-business loan. Private loans, however, offer very limited deferment periods, must be paid at a given monthly rate regardless of your income, and will never be discharged or forgiven even in the case of bankruptcy. If you can't afford grad school without a private loan, wait a year and try again for a better deal. If you can't afford your first-choice option without a private loan but you have a reputable and affordable second-choice option, take it. "