FAQ's of Private Student Loans

Private student loans are credit-based loans for college that are used to pay for qualified educational expenses including tuition, room and board, books, and other school related expenses. A private student loan serves as a way for students to fill the funding gap between the cost of attending school and the amount of federal loans, grants, and scholarships available to them.

No. However, we encourage students to complete the FAFSA each year, to ensure that you take full advantage of grants and other federal aid you may be eligible to receive. Again, private student loans are a way for students to fill the funding gap between the cost of attending school and the amount of federal loans, grants, and scholarships available to them.

While you may apply on your own, applying with a creditworthy cosigner can make all the difference when it comes to a loan application’s chances for success and approval—and even result in a lower rate.

Yes. You will need to reapply each academic year for private student loans.

Federal student loans are available through the US Department of Education and offer fixed interest rates. Private student loans are credit-based loans, feature fixed and variable interest rates, and are available through credit unions or banks.

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.

A credit union is a not-for-profit cooperative financial institution that provides financial services for its members. Credit Unions are owned by their members and their main purpose is to serve the financial needs of its membership. Because of this mission, credit unions are on the forefront of providing thrift and high value financial products and customer service to its membership. More than 90 million Americans belong to a credit union, and it’s estimated that another 40 million qualify for credit union membership according to “field of membership” rules. There are more than 7,000 credit unions across the country.

A credit union’s first priority is to serve the needs of its members, rather than to make a profit for stockholders. This fundamental difference ensures that credit union profits are reinvested back to the people they belong to, by way of dividends, lower rates and lower service fees. As member owned and governed institutions, this mission is always a top priority for credit union management.

The Grace Period is a 6-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 make Good Faith or Interest Only Payments during the Grace Period.

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. In a cosigned loan application both the borrower and the cosigner are applying for the loan and are jointly responsible for making all loan payments. In the unlikely event the borrower does not fulfill their obligation, the cosigner is required to make the monthly payments. Failure to do so will cause negative information to be reported on the cosigner’s credit report.