Private/Alternative Parent Loans
Parents who wish to finance all or a portion of undergraduate educational costs have several options available to them. The best option will vary by family situation. Families with available home equity may want to consider a home equity loan before these other alternatives.
Private Loans vs. Federal Loans
Private education loans may have significant disadvantages when compared with federal educational loans. We encourage families to carefully consider federal education loan options before proceeding with private education loan programs.
|Federal Parent PLUS Loan||Non-Federal Parent Loans|
|Co-Signer Required?||No; although possible way to resolve credit issues||Generally no|
|Credit Check Required?||Yes, although only testing for "absence of negative credit"||Yes; credit worthiness determines eligibility and may affect interest rate|
|Deferment Options||Deferment while the student is in school and during a 6 month grace period after graduation is possible. Interest does continue to accrue.||Varies by program|
|Repayment Period||10 years; no prepayment penalty||Varies by program|
|Interest Rate||6.84% fixed (2015-2016 academic year; rate for 2016-2017 will be announced in mid-May 2016||Varies by program|
|Loan Fees||4.272% if first disbursement is between 10/1/2015 and 9/30/2016||Varies by program|
|Disbursement Method||Funds are credited to the student account at the start of each academic quarter; loan funds in excess of eligible charges are refunded to the parent borrower or to the student (borrower decides)||Varies by program|
Parents who choose a non-federal education loan will need to complete the Private Education Loan Applicant Self-Certification form.
In Section 2 of the self-certification form, the parent borrower will be asked to provide the following three dollar amounts:
A. Student's cost of attendance for the period of enrollment covered by the loan
B. Estimated financial assistance
C. Difference between amounts A and B
The student can find the amounts for items A and B on his or her most recent financial aid award letter (available in Axess). For item A, use the figure listed for Total Expenses. For item B, add the Total Grants and Scholarships plus any student loans and federal work-study eligibility that will be accepted.
If you have trouble locating these figures, you may contact the Financial Aid Office for assistance.
Final Disclosure and Right-to-Cancel Period
Under the federal Truth in Lending Act (TILA), your lender must provide you with a finalized disclosure statement after you have signed your promissory note. The final disclosure statement confirms the terms and conditions of your loan.
At the time that this final disclosure is delivered, your "right-to-cancel" period begins. During this period of six business days, you may cancel the loan by contacting the lender. The lender cannot release the first disbursement of your loan funds until the end of the right-to-cancel period.Updated on April 27, 2016 9:24 AM