Private Student Loans

 Private Student Loans  

If you apply for financial aid, you will likely need to borrow federal and or private student loans as part of your financial aid package. We strongly encourage students to exhaust all federal loan eligibility before borrowing a private student loan as federal loans generally have better terms and conditions. Below is some general information about each type of loan. To learn more, visit our Student Loans page. 

Federal student loans are made by the government, with terms and conditions that are set by law, and include many benefits (such as fixed interest rates and income-driven repayment plans) not typically offered with private loans.

Private student loans are non-federal loans, made by a lender such as a bank, credit union, state agency, or a school. These are credit-based loans and the applicant and cosigner will be required to complete a credit application. Private loans cannot be consolidated with federal loans. If you elect to borrow a private student loan, the Financial Aid & Scholarships Office is able to certify the loan up to your Cost of Attendance minus any other aid you have received.

Before Applying for Private Student Loans

Determine Eligibility for Federal, State and Institutional Aid

Complete the Free Application for Federal Student Aid (FAFSA) to determine your eligibility for federal, state, and institutional aid. Review your Student Aid Report (SAR) and respond promptly to any requests for additional information from the Financial Aid & Scholarships Office. We strongly encourage students and families to learn about the differences in Federal vs. Private student loans in order to make an informed decision.

Eligible undocumented students who do not meet the basic eligibility criteria for federal student aid, but who qualify for Colorado ASSET (Advancing Students for a Stronger Economy Tomorrow) are encouraged to complete the Colorado Application for State Financial Aid (CASFA) to determine your eligibility for aid through the State of Colorado.

Research and Apply for Scholarships

Scholarships are gifts, and in most instances, do not have to be repaid. Visit our Scholarships page for information on applying for scholarships through CU Denver.  

Determine How Much To Borrow

Review your financial aid offer in UCDAccess (if applicable).

Compare your financial aid offer to your Estimated Cost of Attendance (COA).

Remember that the total amount of aid you can receive from all sources, including scholarships, grants, work-study, and loans, cannot exceed the COA.

We strongly encourage you to exhaust all federal, state, and institutional aid sources before applying for a private student loan. Students and families may learn more about the differences in Federal vs. Private student loans in order to make an informed decision.

Ready to choose a lender and apply for private loans?

Ready to Choose a Lender?

Do you understand the difference between federal and private loans are ready to choose a lender?

Choose a Lender

Ready to Apply?

Have you already selected a lender and are now ready to apply for your private student loan?

Non-Federal Private Student Loans

 

It is extremely important from a personal finance standpoint that you first exhaust ALL possible grant and scholarship possibilities as well as all Federal and State aid prior to considering a non-federal private student loan.
We advise you to only borrow what is truly needed to pay for qualified educational expenses.  When borrowing to finance your education, you should give serious consideration to the loan amounts needed throughout your entire education.
You will want to make sure you can comfortably afford your student loan indebtedness based on your expected income upon entering repayment, as well as make sure you are comfortable with the estimated expected monthly payment.

 

Many students, particularly undergraduate students, will likely need to find willing, creditworthy individual(s) to co-sign their non-federal private education loan applications to increase the likelihood of being approved and getting the best pricing and terms.   

 

What are Private Student Loans?

Private student loans are credit-based loans applied for through individual banks that help students “bridge the gap” between the financial aid they have been awarded and any additional amount they feel may be needed to help achieve their educational goals. Being approved for a Private Student Loan depends largely on the credit score of the borrower (and co-signer). With the continuation of tightened credit markets, the largely held belief is that the majority of students applying for Private Student Loans will need co-signers on the application in order to get approved. While rates and repayment terms on Private Student Loans typically aren’t as solid as those offered on the various federal students loans, potentially using Private Student Loans  are often a wiser financial decision to “bridge the gap” than using credit cards or home equity lines of credit. However, it is ultimately the responsibility and choice of the borrower (and co-signer) to make the best personal financial decision.

Who Should Consider Non-Federal Private Student Loans?

Private student loans may be an important source of funding for students who are in one of four situations, either 1) ineligible for federal student loans, 2) in need of loan funding beyond that which federal programs permit during the year, or 3) owe a balance to The University of Mississippi which occurred in a prior academic year or 4) may be able to obtain a lower interest rate on a private loan than on a federal Direct PLUS or Grad PLUS Loan.

Federal regulations forbid an institution from using financial aid funds from a current academic year to pay a prior year (including most recent loan period) balance in excess of $200. If you fall into this category and are unable to pay the prior year balance out of pocket, then you will need to consider applying for a private student loan to cover the prior year balance.

When comparing costs of Private Student Loans, students and co-signers should consider:

Fixed or Variable Interest Rate? Having a fixed rate loan means that the interest rate on your loan never changes—it stays fixed throughout the life of the loan. A variable interest rate is one that changes throughout your loan term and is dependent upon another number—either the London Interbank Offered Rate (LIBOR) or Prime Rate. LIBOR is the average interest rate that leading banks in London charge when lending to other banks.  The Prime Rate is the interest rate that commercial banks in the United States charge their most credit-worthy borrowers, and is a figure largely determined by the Federal Funds Rate (the overnight rate at which banks lend to one another). For a variable rate loan, you would be charged a certain percent above LIBOR or Prime, so your rate would change on a monthly basis to reflect the current LIBOR or Prime. Usually, a fixed rate is a little higher than a variable rate, as the fixed rate doesn’t fluctuate with the economy, while the variable rate may be lower as it is reliant upon an economic indicator.

When considering repayment, students and co-signers should consider:

Is there a grace period after graduation?

How long is the standard repayment term, and what options exist?

Who will service my loans once they enter repayment?

What deferment or forbearance options may be offered?

Will the loan be eligible for loan forgiveness and under what circumstances?

Please be aware that some careers may qualify for loan forgiveness of their Federal loans that private loans do not offer.  For more information on Federal Loan Forgiveness Possibilities review the following website: http://www.finaid.org/loans/forgiveness.phtml

Do I need a “co-signer” to apply for a Non-Federal Private Student Loan?

While there is no requirement to apply with a creditworthy co-signer, doing so often increases both your chances of being approved for a Private Student Loan and potentially lowers front-end fees and interest rates. Most lenders require student borrowers themselves to have an excellent credit history among other criteria, so it is in your best interest to have a knowledgeable and willing co-signer assist you in applying for a Private Student Loan in most cases. Understanding that co-signers don’t want to feel financially responsible throughout the life of the loan (in the event the actual borrower defaults), many lenders now offer “co-signer release” options after a certain number of on-time payments have been made, once the borrower passes a credit check at that time .

 

Regulation Z Requirements

Private Loan Regulations (Title X of the Higher Education Opportunity Act)

Both private lenders and institutions offering private loans to students must comply with regulations per the Federal Reserve Board.

A lender offering private loans for postsecondary educational expenses must firstprovide a disclosure about loan terms and features at the time of application and must disclose information about federal student loan programs that may offer less costly alternatives. If the initial application reaches an approval status, a second loan disclosure statement must be provided to the student at that time. If a student accepts the loan terms provided in the second disclosure statement, a third final disclosure must be provided when the loan is consummated.

An applicant is required to complete a “self-certification form” and return it to the lender before they may disburse the loan to the school. The “self-certification form” may be found on the lender’s website or you may complete the hard copy found here and return it to your lender. If you need assistance completing the form, please visit the Office of Financial Aid at Ole Miss.

Each private lender may have a slightly different application process, so it is best to contact your private loan lender directly if you have any questions.

Last, a lender must provide the student with a 3 day rescission or “right-to-cancel” period after the final loan disclosure form is sent to the student. The 3 day rescission period means that once the school has certified your loan and it is ready to be disbursed, there is a mandatory 3 business day waiting period before the lender may disburse loan funds to the school. If a lender only offers a mailed Final Disclosure (not online), then they must wait 6 days to disburse the loan to the school (3 days for mail time and an additional 3 day “rescission or “right-to-cancel” period).

 

Below is an example of what to expect if you apply for a private loan:

Apply online (you will receive the Application Disclosure Statement)

Complete the Self-Certification Form and return to your lender

If approved for the loan, you will be provided an Approval Disclosure Statement

Finally, you will receive a Final Disclosure Statement (allowing you up to 3 days to cancel the loan before it is disbursed to the school)

How do I apply for and process a Non-Federal Private Student Loan application?

Make sure you have completed the FAFSA and accepted your annual maximum in Federal Direct Student Loans, and exhausted all other financing options first.

Consider applying with a willing, creditworthy co-signer, as doing so will likely increase your chances of approval and potentially lower your interest rate.

Choose a lender. To assist students and parents in choosing a lender for your private loan, the Financial Aid Office has compiled a list of nonaffiliated lenders.  Students and parents are encouraged to compare all loan products that best suits your eligibility and needs.  Borrowers may choose any lender of his/her choice and are not required to choose a lender from the Private Lender Partner List.

Submit the completed Self-Certification Form.

The lender with whom the student and/or co-signer apply will conduct a pre-approval credit investigation and notify the applicant(s) as to approval or denial. If approved by a lender for a Private Student Loan, the student and co-signer will need to review the Master Promissory Note (MPN) for accuracy, sign, and return to the lender. However, most lenders offer an e-sign option online.

Loan proceeds will be sent directly to the University. The proceeds will be applied to the student account to clear any balances, and remaining funds will be direct deposited or mailed directly to the borrower if direct deposit is not setup.

The University of Mississippi uses ELMSelect (Electronic Loan Management) to provide a comparison of lenders and products on our lender list.

Apply Now

(While many private lenders require no monthly payments during both in-school and grace periods, we highly recommend making at least interest-only payments, if possible, to reduce the amount of interest that will be capitalized when the loan enters repayment.)

To learn more about exactly how our office decides which lenders to deem “lender partners,” please visit https://finaid.olemiss.edu/private-lender-partner-policy/ .

We recommend you request a free copy of your credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion), at www.annualcreditreport.com, as you are entitled annually by law. While you must pay a fee to each of the three credit bureaus to obtain your actual credit score(s), it is important to at least check your credit report(s) annually for any errors or illegal use.

In the event that you apply for monetary guide, you will probably have to get government and additionally confidential understudy loans as a component of your monetary guide bundle. We firmly urge understudies to deplete all government credit qualification prior to getting a confidential understudy loan as bureaucratic advances for the most part have better agreements. The following is some broad data about each sort of advance. To find out more, visit our Understudy Loans page.

Bureaucratic understudy loans are made by the public authority, with agreements that are set by regulation, and incorporate many advantages, (for example, fixed financing costs and pay driven reimbursement plans) not regularly presented with private credits.

Confidential understudy loans are non-government credits, made by a moneylender like a bank, credit association, state office, or a school. These are credit-based advances and the candidate and cosigner will be expected to finish a credit application. Confidential advances can't be solidified with government credits. On the off chance that you choose to get a confidential understudy loan, the Monetary Guide and Grants Office can ensure the credit up to your Expense of Participation short some other guide you have gotten.

Prior to Applying for Private Understudy Loans

Decide Qualification for Government, State and Institutional Guide

Complete the Free Application for Government Understudy Help (FAFSA) to decide your qualification for administrative, state, and institutional guide. Audit your Understudy Help Report (SAR) and answer quickly to any solicitations for extra data from the Monetary Guide and Grants Office. We firmly urge understudies and families to find out about the distinctions in Government versus Confidential understudy loans to pursue an educated choice.

Qualified undocumented understudies who don't meet the fundamental qualification measures for government understudy help, yet who fit the bill for Colorado Resource (Propelling Understudies for a More grounded Economy Tomorrow) are urged to finish the Colorado Application for State Monetary Guide (CASFA) to decide your qualification for help through the Territory of Colorado.

Research and Apply for Grants

Grants are gifts, and in many examples, don't need to be reimbursed. Visit our Grants page for data on applying for grants through CU Denver.

Decide The amount To Acquire

Audit your monetary guide offer in UCDAccess (if relevant).

Contrast your monetary guide offer with your Assessed Cost of Participation (COA).

Recollect that the aggregate sum of help you can get from all sources, including grants, awards, work-study, and advances, can't surpass the COA.

We emphatically urge you to debilitate all government, state, and institutional guide sources prior to applying for a confidential understudy loan. Understudies and families might become familiar with the distinctions in Government versus Confidential understudy loans to go with an educated choice.

Prepared to pick a moneylender and apply for private credits?

Prepared to Pick a Bank?

Do you comprehend the distinction among government and confidential credits are prepared to pick a loan specialist?

Pick a Bank

Prepared to Apply?

Have you previously chosen a moneylender and are currently prepared to apply for your confidential understudy loan?

Non-Government Private Understudy Loans

It is critical from an individual budget point of view that you first exhaust ALL conceivable award and grant prospects as well as all Government and State help preceding considering a non-bureaucratic confidential understudy loan.

We encourage you to just acquire what is genuinely expected to pay for qualified instructive costs. While getting to back your schooling, you ought to give serious thought to the credit sums required all through your whole instruction.

You will need to ensure you can serenely manage the cost of your understudy loan obligation in view of your normal pay after entering reimbursement, as well as ensure you are OK with the assessed anticipated regularly scheduled installment.

Numerous understudies, especially college understudies, will probably have to find willing, reliable individual(s) to co-sign their non-government private schooling credit applications to improve the probability of being endorsed and getting the best valuing and terms.

What are Private Understudy Loans?

Confidential understudy loans are credit-based advances applied for through individual banks that help understudies "overcome any issues" between the monetary guide they have been granted and any extra sum they feel might be expected to assist with accomplishing their instructive objectives. Being supported for a Confidential Understudy Loan relies to a great extent upon the FICO rating of the borrower (and co-endorser). With the continuation of fixed credit showcases, the generally held conviction is that most of understudies applying for Private Understudy Loans will require co-underwriters on the application to get supported. While rates and reimbursement terms on Confidential Understudy Loans regularly aren't so strong as those presented on the different government understudies credits, possibly utilizing Private Understudy Loans are much of the time a smarter monetary choice to "overcome any issues" than utilizing Mastercards or home value credit extensions. Be that as it may, it is at last the obligation and decision of the borrower (and co-underwriter) to go with the best private monetary choice.

Who Ought to Consider Non-Government Private Understudy Loans?

Confidential understudy loans might be a significant wellspring of subsidizing for understudies who are in one of four circumstances, either 1) ineligible for government understudy loans, 2) needing credit financing past that which bureaucratic projects license during the year, or 3) owe an equilibrium to The College of Mississippi which happened in an earlier scholarly year or 4) might have the option to get a lower loan cost on a confidential credit than on an administrative Direct In addition to or Graduate In addition to Advance.

Government guidelines deny an establishment from utilizing monetary guide assets from an ongoing scholastic year to pay an earlier year (counting latest credit period) surplus in overabundance of $200. In the event that you fall into this class and can't pay the earlier year balance from cash on hand, then, at that point, you should consider applying for a confidential understudy loan to cover the earlier year balance.

While looking at expenses of Private Understudy Loans, understudies and co-underwriters ought to consider:

Fixed or Variable Financing cost? Having a decent rate credit implies that the financing cost on your advance never shows signs of change — it stays fixed over the lifetime of the advance. A variable financing cost is one that changes all through your credit term and is subject to another number — either the London Interbank Offered Rate (LIBOR) or Prime Rate. LIBOR is the typical loan cost that driving banks in London charge while loaning to different banks. The Great Rate is the loan cost that business banks in the US charge their most credit-commendable borrowers, and is a still up in the air by the Government Finances Rate (the short-term rate at which banks loan to each other). For a variable rate credit, you would be charged a specific percent above LIBOR or Prime, so your rate would change consistently to mirror the ongoing LIBOR or Prime. Typically, a proper rate is somewhat higher than a variable rate, as the decent rate doesn't vary with the economy, while the variable rate might be lower as it is dependent upon a monetary pointer.

While considering reimbursement, understudies and co-underwriters ought to consider:

Is there a beauty period after graduation?

How long is the standard reimbursement term, and what choices exist?

Who will support my credits once they enter reimbursement?

What postponement or restraint choices might be advertised?

Will the credit be qualified for advance absolution and under what conditions?

Kindly know that a few professions might meet all requirements for credit pardoning of their Government advances that private credits don't offer. For more data on Government Advance Absolution Prospects survey the accompanying site: http://www.finaid.org/credits/forgiveness.phtml

Do I want a "co-underwriter" to apply for a Non-Government Private Understudy Loan?

While there is no prerequisite to apply with a trustworthy co-underwriter, doing so frequently increments both your possibilities being supported for a Confidential Understudy Loan and possibly brings down front-end charges and financing costs. Most moneylenders require understudy borrowers themselves to have a magnificent financial record among different rules, so it is to your greatest advantage to have a learned and willing co-endorser help you in applying for a Confidential Understudy Loan generally speaking. Understanding that co-endorsers would rather not feel monetarily capable over the lifetime of the credit (in the occasion the genuine borrower defaults), numerous banks presently offer "co-underwriter discharge" choices after a specific number of on-time installments have been made, when the borrower passes a credit check around then.

Guideline Z Necessities

Confidential Advance Guidelines (Title X of the Advanced education Opportunity Act)

Both confidential banks and establishments offering private advances to understudies should follow guidelines per the Central bank Board.

A moneylender offering private credits for postsecondary instructive costs must firstprovide a revelation about advance terms and elements at the hour of utilization and should unveil data about government understudy loan programs that might offer less exorbitant other options. In the event that the underlying application arrives at an endorsement status, a second credit exposure explanation should be given to the understudy around then. On the off chance that an understudy acknowledges the credit terms gave in the second revelation proclamation, a third last exposure should be given when the credit is culminated.

A candidate is expected to finish a "self-certificate structure" and return it to the moneylender before they might dispense the credit to the school. The "self-accreditation structure" might be found on the bank's site or you might finish the printed copy tracked down here and return it to your moneylender. In the event that you want help finishing the structure, kindly visit the Workplace of Monetary Guide at Ole Miss.

Every confidential bank might have a marginally unique application process, so it is ideal