Private student loans are not issued by the federal government. Instead, they are funded by other types of lenders such as banks and credit unions.
These alternative lenders have the choice of setting their own interest rates and underwriting criteria. For example, some alternative lenders forgo using a borrower's credit score to make an approval, such as educational criteria.
Alternative lenders can also tack on additional underwriting criteria on top of credit scores, which allows them to potentially change their rates depending on different details.
When can you use private student loans?
Private student loans can be used for traditional higher education (such as four-year colleges) as well as non-accredited and new forms of education, like technology bootcamps and certificate training programs. Additionally, if your federal aid package doesn't cover all of your financing needs, a private student loan can make up the difference.