Usually the unsubsidized loan is still better, but if your private loan is fixed at an interest rate that you think is reasonable it can be fine that way. It looks like stafford interest rates will probably go up for a while, though eventually they will go down again. Most of the time government loans are the cheapest interest rate you can find, but that's not always true. Other than interest rate, I don't think it really matters all that much though I think there are other differences. In general I have heard that once your loans are in repayment, the government loans help your credit score more than other loans (if you are on time and such)... but I'm not sure if that's true for all credit bureaus.