Private Student Loans
What are private student loans?
Private student loans (also known as alternative loans) are student loans from a lending institution that are not part of the federal government guaranteed loan programs. They usually do not have generous benefits as federal government guaranteed loan programs do and can have high variable interest rate.
PRIVATE EDUCATION LOAN APPLICANT SELF-CERTICATION FORM AND FAU COST OF ATTENDANCE
Due the enactment of new regulations (Title X - Private Student Loan Transparency and Improvement Act of 2008), a student applying for a private educational loan is required to complete the Private Education Loan Applicant Self-Certification Form. This form must be submitted directly to the lender. To complete this form, information regarding FAU cost of attendance must be provided. Information regarding the total cost of attendance at FAU can be found at: http://www.fau.edu/finaid/apply_aid/coe.php.
SOME FACTORS TO BE CONSIDERED FOR WHEN COMPARING PRIVATE LOAN PRODUCTS:
Check the financial aid glossary for unfamiliar words. Make sure you meet all loan eligibility requirements specified by the lender which may include enrollment requirement and / or satisfactory academic progress requirement.
REMEMBER - BORROW ONLY WHAT YOU NEED!
LOAN PERIODS: When applying for an alternative loan, the lender will ask that you supply them with the loan period (also called period of enrollment) you are requesting the loan for. Below is a list of valid FAU loan periods. The loan period you specify should be ONE of these:
PLANNED ENROLLMENT AND HOUSING: In order to process a private student loan, Florida Atlantic University will need information regarding your planned enrollment and housing status for the loan period you have specified. FAU will normally obtain this information from your Student Aid Report, which is created after you file a Free Application for Federal Student Aid (FAFSA). If you are requesting to be processed for a private student loan and do NOT have a Student Aid Report on file with Florida Atlantic University for the loan period you are requesting, you MUST submit a Statement of Planned Enrollment and Housing for Alternative Loan Processing (number 4 under Loan section).
IMPORTANT NOTE ON PRIVATE STUDENT LOAN DISBURSEMENTS :
The enactment of the new regulation (Title X - Private Student Loan Transparency and Improvement Act of 2008), gives the borrower a three days of recession period. During the recession period the borrower can cancel the loan and the lender cannot disburse the loan fund. The recession period starts when the lender finalizes the loan processing and puts the loan status in ready for disbursement status.
In some cases, private student loans are disbursed to FAU as paper checks. The paper checks will be made co-payable to FAU and the student. The student will need to endorse and return the paper check to FAU. Upon the receipt of the endorsed paper check, FAU will process it thru the disbursement process.
FINDING PRIVATE LOAN LENDERS
1. Before you start to search for private loan lenders, you should explore your eligibility for Federal Financial Aid. The instructions to apply for the Federal Financial Aid can be found here. If you qualify for Federal Financial Aid, you should have exhausted your Federal Financial Aid eligibility prior borrowing from private loan products. Remember that private loans usually carry high, variable interest rates, with very limited borrower benefits when compared with federal loans.
2. You can utilize well-known Internet search engines to find reputable private loan lenders. You can also utilize web sites that list private loan lenders such as http://www.finaid.org/loans/privatestudentloans.phtml. You should research consumer reports regarding the lenders and their products prior applying for their private loan product.
3. You can inquire financial institutions such as banks or credit unions about their student private loan products.
4. Depending on the lenders, they may charge you fees to originate the private loan for you. Remember to compare several products from different lenders to ensure that you receive the best private loan product with a favorable interest rate that suits your need.