As tuition rises, the number of students taking out private loans to supplement federal aid is increasing.

Mary Jo Smith, school relations manager for Iowa Student Loan Liquidity Corp., said she is seeing an increase in students taking out private loans because students are not getting enough money from federal loans to cover increasing school costs.

“Some students choose to go with private loans to avoid working at the same time as going to school,” Smith said.

Roberta Johnson, associate director of financial aid, said it’s more beneficial for students to use federal loans because they don’t have to be paid back and don’t incur interest until the student is out of school.

“The federal programs are also better than private loans because students may qualify for subsidized loans or grants after they have completed the Free Application for Federal Student Aid,” Johnson said.

Many of the problems with federal loans are that students are not receiving enough money to cover their expenses. The federal loan programs were last reviewed in 1992.

“This leaves students with big gaps to fill,” Johnson said.

Johnson said the university is making their own efforts to generate funds for students, and she is glad the federal programs will be reviewed next year.

The private loan Iowa Student Loan offers is the Iowa Partnership Loan, which differs from a federal loan because it has a higher interest rate and interest begins immediately after the money is borrowed. However, payments can be deferred for 84 months.

Tom Hillers, senior in journalism and mass communication, took out a private loan from a bank to help pay for his expenses during school.

“Having the private loan just made things much easier and allowed me to not have to worry about having a job all the time,” Hillers said.

Johnson said sometimes it can be difficult for students to get private loans because of poor credit histories.

Another trend Johnson has noticed with the increase in tuition is students are working more hours.

This could cause students’ grades to fall and it may take longer for them to graduate, leading to more expenses, she said.

“Moderate working is beneficial to students to learn time management, but if students are working over 18 to 20 hours and are full-time [students], that is too much,” Johnson said.