PRIVATE STUDENT LOANS
1. What is cuStudentLoans?
2. What is LendKey?
3. What is a credit union?
4. What is the cuScholar Private Student Loan?
5. What is the difference between a private student loan and a federal student loan?
6. How do I know if I’m eligible for federal aid?
7. How much financial aid am I eligible to receive?
8. What is an Expected Family Contribution?
9. What is Cost of Attendance?
10. How can I learn more about my financial aid options?
11. Does applying for a federal loan impact my ability to obtain the cuScholar Private Student Loan?
1. Who is eligible for the cuScholar Private Student Loan?
2. What is a cosigner?
3. Is a cosigner required to obtain the cuScholar Private Student Loan?
4. Will the cosigner’s credit record be affected?
5. Is the cosigner responsible for repaying the loan?
6. What is the cosigner release process?
7. How much can I borrow?
8. Do I need to be enrolled in an educational institution to complete the application process?
9. Why isn’t my school on the list?
10. How is the eligible schools list determined?
1. When should I begin the process?
2. How do I apply for the cuScholar Private Student Loan?
3. How does the cosigner complete his/her portion of the application?
4. Will both the borrower and cosigner’s credit be checked?
5. What is ACS?
6. What documentation is required in the application?
7. What proof of enrollment do I need to provide?
8. What proof of income do I need to provide?
9. How do I become a credit union member?
10. What is school certification and how can it affect my loan?
11. How do I check the status of my application?
12. What do the stages of the status bar mean?
13. How long is the process?
14. After filling out an application is there a commitment to borrow?
1. What are the rates and fees on the cuScholar Private Student Loan?
2. How is the interest rate calculated??
3. What is the LIBOR Index?
4. Do you offer any borrower benefits?
5. How does the ACH discount work?
6. What is the repayment term of the cuScholar Private Student Loan?
7. How soon will a borrower receive the loan proceeds?
8. How often is accrued interest capitalized?
1. What is the In-School Repayment period?
2. What is a Grace Period?
3. What is a Proactive Payment?
4. What repayment options are available during the in-school period?
5. When do borrowers enter full repayment status?
6. How are payments made?
7. Can a borrower prepay the loan at any time?
8. What options are available for borrowers struggling to make payments?
9. What are the forbearance policies?
cuStudentLoans is a network of over 175 not-for-profit credit union lenders who use common underwriting and pricing to provide members with an affordable private student loan program. This program is composed of two loan products: the cuScholar Private Student Loan and the cuGrad Student Loan Consolidation. cuStudentLoans is managed by a Credit Union Service Organization (CUSO) called Member Student Lending, LLC.
LendKey Technologies, Inc. is the cloud-based technology company that powers cuStudentLoans.org. LendKey works closely with Member Student Lending, a Credit Union Service Organization (CUSO), to ensure credit union members receive exceptional service. LendKey is also the servicer for the cuScholar Private Student Loan. For more information about LendKey, please visit www.lendkey.com.
A credit union is a member-owned financial institution providing credit at competitive rates and other financial services to its members. To learn about the benefits of credit unions, please visit our About Credit Unions section.
The cuScholar Private Student Loan is issued from a not-for-profit credit union participating in the cuStudentLoans program and can be used to pay for qualified educational expenses, including tuition, room and board, books, and other school related expenses. Private student loans serve as a way for students to fill the funding gap between the cost of attending school and the amount of federal loans, grants, and available scholarships.
Federal student loans follow guidelines set forth by the U.S. Dept of Education and typically offer fixed and lower interest rates compared to private student loans. However, federal loans, unlike most private loans, have borrowing limits, which may not allow a student to borrow enough to cover the entire cost of education. Private loans help students fill the funding gap between the cost of attending school and the amount of federal loans, grants, and available scholarships. Both private and federal student loans typically allow students to defer payments while in school, and some offer economic forbearance options once a student completes school. Unlike federal loan programs, private lenders assess the credit history of the borrower and cosigner before making a loan.
Eligibility for federal, state and university funded financial aid is determined by completing the Free Application for Federal Student Aid (FAFSA). All students are strongly encouraged to apply for federal aid by completing the FAFSA, which can be obtained online at www.fafsa.ed.gov.
The financial information you provide in the Free Application for Federal Aid (FAFSA) is used by the government to determine your Expected Family Contribution (EFC), which is the amount you and your family are expected to pay towards your education. The EFC is then subtracted from the Cost of Attendance (COA) for your respective school to determine the amount of financial aid you are eligible to receive.
The Expected Family Contribution (EFC) is a calculated assessment of how much your family is expected to contribute to your college costs. The EFC takes into consideration your family’s financial strength – income and assets. Other factors considered include the number of family members and number of family members in college.
The Cost of Attendance (COA) is the total cost as determined by a school’s financial aid office, including tuition and fees, room, board, books, transportation and miscellaneous expenses. Every school has a slightly different Cost of Attendance, but all must meet standard guidelines as set by the U.S. Department of Education. The Cost of Attendance represents the maximum amount of financial aid, grants, scholarships and student loans that can pay to an account during an academic period. This prevents students from applying for an excessive amount of student loans beyond the established Cost of Attendance.
It is recommended that you consult with your school’s financial aid office, and visit the College Resource Center where you can read more about all of your financial aid options and refer to our financial aid glossary to better understand the terms you will need to know.
No. Students are encouraged to explore and exhaust all federal aid options first, and then use private loans to help pay the remaining education expenses.
To apply for the cuScholar Private Student Loan, you must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible school, and you must be a member of a participating credit union. If you’re not currently a member of a credit union, you will be prompted to select one that you can join during the application process.
You or your cosigner also must meet our credit requirements. Choosing a creditworthy cosigner will increase the likelihood of being approved and may lead to a lower loan rate. You can apply without a cosigner if you meet all of the credit criteria by yourself.
A cosigner is a parent, grandparent, guardian or other adult who is creditworthy and willing to assume legal responsibility for the loan liabilities along with you. The cosigner must be a U.S. citizen or permanent resident.
In most instances, a cosigner is required to obtain the cuScholar Private Student Loan. A creditworthy cosigner increases the likelihood of your loan approval and may lead to a lower loan rate. Creditworthy students that meet the credit requirements may apply without a cosigner.
Yes, in a cosigned loan both the borrower and the cosigner are jointly liable for making all loan payments. The loan will appear on both the borrower and cosigner’s credit report.
If the borrower fails to repay the loan, then the cosigner is responsible for repaying the loan. However, the cosigner may be released of this obligation once the borrower, alone, meets the lender’s credit and income criteria and makes 24 consecutive and on-time full payments of principal and interest during the Repayment Period.
Cosigner release is available for creditworthy borrowers after making consecutive on-time full principal and interest payments during the Repayment Period.
The borrower may request for cosigner release and retain the loan on a stand-alone basis, if the following requirements are met:
*Note: The cosigner release process is initiated only after a request has been emailed to email@example.com. It may take up to 7-10 business days to process a cosigner release request.
The minimum you can borrow is $2,000 per year. The lifetime maximum you can borrow is the certified amount determined by your school, up to $120,000 for undergraduate students and $160,000 for graduate students. The school certified amount is typically the Cost of Attendance (COA) less any other financial aid received.
Yes, you must provide proof of enrollment at an eligible school within the cuStudentLoans program to complete the application process.
Not all educational institutions participate in or are eligible for our program. Unfortunately, we’re not able to accept a loan application if your school is not on our eligibility list.
School eligibility is determined using a blind study that assesses a variety of factors. The eligible schools list is reviewed by lending partners every year.
We encourage you to start early. You can start the loan application process once you know what school you will be attending, the Cost of Attendance for the current academic year, and can provide proof of enrollment. The process can take from 2-8 weeks depending on the borrower, school, and time of year. Note: If you are applying for the fall term, you cannot apply before June 1st.
The application process must be completed online at apply.custudentloans.org.
During the application process, cosigners will be asked to complete their own application and create an account using a different email address than the borrower’s account. Cosigners complete the same application procedures as the borrower.
Yes. During the application process, and as part of the underwriting process, a credit bureau report is pulled on both the borrower and cosigner. The borrower’s creditworthiness or ability to repay the loan is assessed based on the credit of the borrower, the credit of the cosigner, as well as the borrower’s academic attributes. The borrower and cosigner credit reports will expire after 90 days. If the application is incomplete at this time, the borrower and cosigner will be required to re-pull credit to continue the application.
ACS (Academic Credit Score) is a proprietary scoring model that assesses borrower creditworthiness by taking into account not only the credit bureau data, but also the student’s academic characteristics such as GPA, course of study, and class standing.
After you are conditionally approved based on credit, you (and your cosigner) may be asked to submit the following required documents:
If you are a returning student, you must provide an unofficial copy of your most recent graded transcript as proof of enrollment at the school you are attending. If you are an incoming freshman, your school will confirm your enrollment during the certification process.
You must provide a copy of your two most recent pay stubs within the last 60 days. Pay stubs submitted for review must clearly display the following five pieces of information:
Depending on your type of employment or financial situation, we may be able to accept alternate proof of income:
If the loan is cosigned, only the cosigner needs to submit these documents.
If you are not a member of a credit union, we will match you with a participating credit union that you’re eligible to join during the application. You will need to complete membership before your loan can be reviewed for final approval. If you decide to cancel the loan request there is no further obligation for membership. Learn about the benefits of credit unions and the simple membership process in About Credit Unions.
Before the loan can be finalized, the school must authorize the loan disbursement date and loan amount. This process is completed by the school’s financial aid office where they certify that the student attends the school and meets a minimum registration status of half-time or greater.
School certification also acts as a borrower protection to prevent over borrowing. The school has authority to reduce a private student loan to fit within the Cost of Attendance after all other financial aid is paid to the account.
The certification request is sent to the school through an electronic servicer (ELM, Great Lakes, etc.) or faxed upon request. Once the certification is returned, the borrower can accept the final disclosures and the loan will be disbursed.
Schools will vary on the amount of time it takes to process a student loan certification. Be advised that it usually takes 7-10 business days, but can take longer for a school to respond to a certification request after we have sent it.
If you are concerned about meeting your tuition deadline, be sure to apply early and stop by your financial aid office after the certification has been made available to confirm an estimated processing time.
The status of your application is available by signing in to your account. The green status bar you see immediately after login indicates which state your application is currently in.
You should allow yourself 6-8 weeks from the time of the initial application until your school receives your funds. Every private student loan must be sent to the borrower’s school for certification prior to being finalized.
Remember, once the process is complete, the funds may not be disbursed to the school right away. The funds will be transferred on a date specified by the school.
No. A borrower may withdraw a request at any time and has up to 30 days from the loan disbursement date to return the money and avoid being charged any fees or interest.
The cuScholar Private Student Loan is a variable rate loan. Please visit Rates & Fees for the current rates.
Interest Rate = Base Rate + Loan Margin
The Base Rate is the average of the 3-Month LIBOR (London Interbank Offered Rate) Index, as published in the Wall Street Journal on the first business day of each of the three months immediately preceding each quarterly adjustment date.
The Loan Margin stays constant for the life of the loan and is determined at loan inception, depending on the borrower’s credit history and ACS Grade.
The London Interbank Offered Rate (or LIBOR) is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks. This offered rate is the funding cost to a bank and is commonly used as a benchmark for the bank’s lending rate.
Yes! Qualified borrowers can enjoy:
Simply select the automatic ACH payment option and immediately enjoy a .25% reduction of your interest rate. The ACH discount is subject to the floor rate. If the automatic payment is cancelled at any time after enrollment, the rate reduction will discontinue until automatic payment is reinstated. It may be suspended during periods of forbearance and deferment.
The repayment term begins six months after the borrower graduates or ceases to be enrolled at least half-time in an eligible degree-granting program. Once repayment begins, the borrower has 10 years to repay the loan.
The loan proceeds will be sent directly to the school by check or through electronic funds transfer (EFT). The check will usually be mailed within 5-7 business days of the borrower accepting their final disclosure unless the school requests a later date.
Unpaid interest accrues while the borrower is in school. Upon entering full repayment, all accrued and unpaid interest is capitalized (or added) to the principal balance once at the time repayment begins.
The in-school period lasts while the borrower is enrolled at least half-time and includes a six month Grace Period once the borrower leaves school. During this time, the borrower is required to either make full interest payments or a monthly $25 Proactive Payment. Any unpaid interest continues to accrue during the in-school period.
The Grace Period is a six-month period of time that begins once a borrower graduates or is no longer enrolled at least half-time in a degree granting program. After the Grace Period, the borrower must begin making regular principal and interest payments. Borrowers are required to either make full interest payments or a monthly $25 Proactive Payment during the Grace Period.
A Proactive Payment is a $25 monthly payment the borrower must make while they are in school. The borrower will begin making full principal + interest payments once they have separated from the school or dropped below half-time status. The Proactive Payment helps the borrower demonstrate financial discipline and saves the borrower interest expenses over the life of the loan.
Two in-school repayment options allow the borrower to defer full principal and interest payments until six months after separating from the school:
Borrowers are given a six-month Grace Period once they graduate or separate from school before they enter repayment status. Once borrowers enter repayment status, they are responsible for making full principal and interest payments.
All monthly loan payments are made to the servicer, LendKey, using either an electronic transfer from a financial institution account designated during the application process or mailed in by check. Borrowers can set up automatic monthly ACH payments by logging into their account, clicking the Payments tab, and Manage Payments. Please have the following information available: Financial Institution Name, Account Type, Account Holder Name, Routing Number, and Account Number.
Borrowers can submit payments via paper check to the following loan payment address:
P.O. Box 824575
Philadelphia, PA 19182-4575
Please write your Loan ID and the payment date in the memo line. For example, if your payment is for your March 1st invoice, please put “03/01/12” next to your Loan ID.
Note: Please do not send a check payment before you receive your statement for that month.
Yes, a borrower may prepay the loan either partially or in full at any time without incurring any fees or penalties. Please submit prepayments electronically through your account or via paper check and ensure to write your Loan ID and “Toward Principal” in the memo line.
Some borrowers may not have found employment yet six months after leaving school; therefore, borrowers may request to pay just the interest expense on the loan for the first two years while in repayment status. This is referred to as the Initial Interest Only option. The Initial Interest Only option can be requested in writing during the six month Grace Period.
Borrowers more than two years out of school may request forbearance.
If you are unable to make your payment due to economic hardship, unemployment, underemployment, returning to school or medical reasons, you may be eligible for forbearance. The maximum allowable forbearance time is 18 months granted in increments of up to 6 months. You must complete a forbearance form for consideration and are responsible for all payments until notified of your request being approved.
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