Information about Private Loans
For those students who need aid in addition to grant and federal loans, private education (or alternative) loans are available through private lending agencies. Private loans are not part of the initial award package, but are added later at the student's request. Students apply on their own and are usually only turned down if they have a poor credit history. These loans have higher interest rates than the federal loans, making them a student's final option to cover their costs. Some private loans offer a lower interest rate for students applying with a co-signer who has a healthy, established credit history. Prior to accepting a private loan, students are strongly encouraged to obtain a loan amortization statement to understand how much money the private loan will cost you over the time you pay it back. Private loans CANNOT be consolidated with federal loans and do not have the same flexible repayment as the federal loans. Please keep in mind that the total of all aid sources cannot exceed the total budget for the school year.
Private education loan organizations previously used at the GSD:
NellieMae: 800-634-9308: http://www.nelliemae.org
CitiBank: 800-692-8200: http://www.studentloan.com
SallieMae: 800-828-0290: http://www.salliemae.com
TERI: 800-255-8374: http://www.teri.org
The process and timing for applying for a private loan
§ Student reviews the Student loan debt section of this handbook.
§ Student determines the amount they need to borrow and how soon
they need the money, and then verifies that they have room in their budget.
§ Student contacts the private loan organization to pre-apply online,
over the phone or with a paper application, verifying the processing time
involved. Some agencies don't like to process a loan too far ahead of
disbursement.
§ The lender checks the student's credit history. Rejected students
are notified. Names of students who are approved are sent to the Financial
Aid Office to verify enrollment and budget.
§ School sends notification back to the lender, including disbursement
dates and address.
§ The lender notifies the student and the school once the loan is
approved and ready to disburse. The student will have to sign a Promissory
Note.
§ The lender sends the loan check at the designated time.
§ The check is deposited into the student's Term Bill account. The
student may have to co-sign the check.
§ Refunds are issued to students whose Term Bill shows a resulting
credit.
Students who are not approved for a private loan
Private loans are the last alternative for funding education. Unfortunately
the GSD cannot financially compensate a student for the amount needed
in the private loan. The student should make every attempt to resolve
any reasons for a rejected loan application.
§ Do not simply try another lender. All lenders use similar processes.
§ Contact the lender for specific reasons. Sometimes there are mistakes
on credit histories. Some problems can be resolved. There may be the option
to apply with a co-signer.
§ Obtain a copy of the credit history if it is in question (see below).
Credit rating information
Payment histories on credit cards, private and federal loans are reported
on credit histories. Slow payments and/or default can hurt chances for
future borrowing. Individuals can obtain a free copy of their credit report
once per year. It is a good idea to check your credit history occasionally.
The leading companies for credit histories are listed below.
Experian: http://www.experian.com
Equifax: http:// www.equifax.com