What is a Private Educational Loan?
- Private educational loans help bridge the gap between the actual cost of attendance and other financial aid that the student may receive.
- Private loans will pay any charge on a student's account, including prior-term charges.
- Private educational loans are offered by private lenders; however, it is recommended that the Free Application for Federal Student Aid (FAFSA) be filed to determine eligibility for federal loan programs before accepting private educational loans.
- Each lender/loan may have different eligibility requirements and terms (repayment, interest rate, etc.).
- Eligibility for private educational loans often depends on a borrower's credit score and application
,and/or credit worthiness of the student's co-signer.
- A co-signer may be required/preferred for undergraduate borrowers regardless of the student's relationship with the lender.
- Private educational loans require a school certification. Certification requests are sent to UA via ELM only after the credit check has been approved.
- The University of Arizona (UA) is required to ensure that the sum of private educational loans and other financial aid does not exceed the student's cost of attendance.
Steps to Apply for a Private Educational Loan
1. Every year in January, file the Free Application for Federal Student Aid (FAFSA) to determine your eligibility for aid such as federal work study, scholarships, grants, or any other funds that you do not have to repay.
2. Be sure to consider any Federal Direct Student Loans offered.These loans have fixed interest rates and various repayment options. The FAFSA must be filed to be considered for Federal Direct Student Loans.
3. Compare your private loan options with guaranteed Federal Direct Student Loans. Give yourself time to carefully consider carefully how you want to borrow. You should review and compare loan options for the next academic year, no later than May of each year.
4. Based on your cost of attendance, determine the amount you can borrow.
- See your financial award notification on your UAccess Student Center for your cost of attendance.
- Consider a conservative amount in order to minimize your loan debt.
- Academic year (fall/spring) loan amounts will be divided into two equal disbursements. Private educational loan amounts must be requested for the entire period in which you are enrolled.
- Research lenders/private educational loans. Refer to the "Questions You Should Ask Prior to Selecting a Lender/Private Educational Loan" section below.
5. Apply for a private educational loan directly with your lender of choice.
- Complete an application via the lender's website. If you choose to apply with several lenders, complete all of your applications within a 30-day period so as to not adversely affect your credit score.
- When you are applying, the lender will ask you for the loan period. Use the loan period listed below.
A Private Educational Loan Application Self-Certification form must be submitted to your lender before the loan can be processed. Information from your UA financial aid award notification will be needed to answer the lender's questions regarding your cost of attendance and other financial aid information. See your UAccess Student Center for your financial aid award notification.
6. Monitor your UAccess Student Center and UA email for information regarding your private educational loan.
- The lender will send UA an electronic request for school certification. University/lender protocol is for the lender to send UA a certification request after the borrower has completed all requirements and self-certifications and passed the credit check.
- UA is required by law to ensure the sum of private educational loans and other financial aid does not exceed your cost of attendance. If this total exceeds your cost of attendance, your loan may not be certified for the full requested amount, and/or a portion of your loan funds may be returned to your lender
- Regulations require lenders to delay your disbursement for six to ten business days after your final acceptance of the loan terms and conditions.
- Academic year loan amounts will be divided into two equal disbursements. Private educational loan amounts must be requested for the entire period in which you are enrolled.
Questions You Should Ask Prior to Selecting a Lender/Private Educational Loan
Regarding Interest Rates
- What is the interest rate? Is the interest rate fixed or variable?
- If variable, what is the basis for the variable rate (US Prime rate, 91-day T-Bill, Variable Floor Rate (VFR), or the 3 month LIBOR rate)?
- If variable, how frequently will the interest rate change?
- For additional information, see the latest key market rates.
- Would having a co-signer lower the interest rate?
- Is there a co-signer release option?
- How often is interest added (capitalized) to the principal loan amount?
- How are payments applied to the principal balance?
- Can payments be deferred while in school?
- Are there any discounts available during repayment?
- Are there any pre-payment fees?
- Are there late payment fees?
- Under what circumstances are the late fees assessed?
Regarding Lender Policies
- Does the lender offer Electronic Fund Transfer (EFT)?
- Choosing an EFT lender over a lender who uses paper processes will speed up the release of your funds.
- If a lender only offers paper applications and/or paper checks, you should question their administrative and technical abilities as a lender.
- Can multiple loans be included in one statement?
- Will the lender normally sell their loans to another lender?
- Can I apply for a private loan to pay past-due charges?
- Can I apply for a private loan after the term has ended? How long after?
Students can select a private lender of their choice, even if the lender does not appear on this list. Lenders are selected for the list based on their history of approving loans for UA students, UA's objective of having more than six competitive lenders, and a review of the lender's official Request for Information (RFI). Lender names are randomly placed on the list. The order in which lenders appear on the list does not imply a preference by The University of Arizona.
Notice of Disclosure for Private Educational Lenders
Borrowers should research lenders before selecting a private educational loan. Review the list of questions above to ask each lender before applying for a loan.
In this era of low interest rates, smart advertising and marketing, you must be your own consumer protection agent.
Interest Rate Warning
The private educational loan interest rates offered from each lender above will vary. They may have fixed or variable interest rates. The interest rates and fees listed will also vary based on the borrower's or cosigner’s credit. You may compare up to five different lenders side by side at the web site above.The best way to get a true interest rate comparison is to read the lender's web site and apply. A student’s credit score is not adversely affected by multiple student loan requests within a consecutive 30-day period.
How Lenders are Selected for this List
Lenders are selected for the list based on their history of approving loans for UA students, a review of the lender's official Request for Information (RFI), and UA's objective of having more than six competitive lenders.
How the Lender's Position on the List is Determined
Lender names are randomly placed on the list. The order in which lenders appear on the list does not imply a preference by The University of Arizona.