Loans: Private Student Loan
Private student loans are offered by private lending institutions as an alternative aid option if additional funding is necessary to supplement a student's other financial aid resources. Private loans are borrowed by students in their own name; because private loans are subject to credit approval, however, a co-borrower may be required.
2008-2009 ACADEMIC YEAR
Details
- A private loan's interest rate is dependent upon the credit rating of the borrower, and if applicable, the credit rating of the co-borrower.
- A private loan is unsubsidized, meaning that interest begins accruing immediately upon the loan's first disbursement.
- To be eligible, the borrower must::
- meet all regular eligibility requirements (including satisfactory academic progress),
- be enrolled at least halftime towards an undergraduate or graduate degree, and
- meet lender-specified credit requirements.
- Check with your lender about fees, grace periods, deferment options, and repayment options.
- A private loan may be processed without a Free Application for Federal Student Aid (FAFSA) on file, if the student never plans to file. If, however, a student files a FAFSA (or indicates he/she plans to file), we will wait to certify the private loan until the student's federal and state financial aid eligibility is reviewed.
- A private loan may be processed for up to the amount of the Cost of Attendance, minus any aid the student is already receiving.
Private Loan Considerations
- Has all federal loan eligibility from the FAFSA been received?
- How much should be borrowed based upon the amount needed for unmet educational expenses?
- What is the lender's history and reputation in offering private loans?
- What is the interest rate? Is the interest rate variable? If variable, does it have a maximum rate?
- Does the lender charge loan fees? If so, how much are the loan fees?
- When does repayment begin? If it is deferred, how will interest be calculated?
- Does the lender offer any additional borrower benefits or incentives?
- Is there a pre-payment penalty?
An available resource to help in the selection of lenders is the Private Student Loan Comparison Chart offered by www.FinAid.org.