Private Loan Programs
Many lenders have private alternative loan programs for students who have borrowed their maximum Federal Title IV Subsidized and/or Unsubsidized annual or aggregate loan limit and still have unmet need for the academic year. A private loan is provided by a private educational lender and is issued expressly for postsecondary education expenses to a borrower, regardless of whether the loan is provided through the educational institution that the student attends or directly to the borrower from the private educational lender.
Federal law requires that before a lender may disburse a private student loan to a borrower attending an institution of higher education, the lender must obtain a completed and signed self-certification form from the borrower. The Financial Aid Office can assist with providing the Cost of Attendance, Estimated Financial Assistance, and remaining need which is data required for the Self-Certification form. The lender must provide an Application Disclosure, an Approval Disclosure, and a Final Disclosure to the student.
You can go to the Loan Calculator in Adventures in Education for an example of how much you will have to pay using a standard repayment method.
Private Loan Comparison Questions to Consider:
- What is the current interest rate?
- Is this a variable or fixed interest rate loan?
- What is the maximum loan amount?
- What are the enrollment requirements to receive a loan?
- If any, what fees are attached to the loan?
- Is this a credit-based loan?
- Is a cosigner optional or required?
- When does the loan enter repayment?
- Are deferment options available?
- Are forbearance options available?
What Students Should Know:
- The difference between federal and private student loans
- All the terms and conditions of their loans
- How to find the entity that holds and services their loans
- Who to contact with questions or issues
- Repayment options
- What to do if they can't make payments
- The consequences of missing payments
- The Consequences of default
- How to get a loan out of default
- How bankruptcy impacts a loan