A college education is more important than ever before, yet paying for one can be a challenge for many students and their families. Private loans can help you pay for college expenses that may not be covered by federal loan programs or other financial aid. These loans help to close the gap between your financial aid resources and college costs.
Private Education Loans
Do you need a private education loan?
Although you don’t have to apply for federal, state or school financial aid before applying for a private loan, you should.
Use our aid estimator to see how much financial aid you could get from all sources. Accept all grant (gift) aid, any scholarships, and borrow any federal direct loans or Perkins loans offered to you prior to borrowing a private loan.
Private loans will typically carry higher interest rates and fees than federal loans and offer less attractive repayment terms. These loans are based on your credit rating and debt-to-income ratio (not financial need) and will usually require a co-signer.
Private loans are offered by a variety of lenders and carry a range of terms, conditions and benefits. Students are encouraged to very carefully compare the terms of several private loans before considering which one best meets their particular needs. To facilitate your comparison shopping, you should also read this important information about private student loans provided by the Federal Trade Commission.
The process for obtaining a private or alternative loan varies from lender to lender. Here a few tips to ensure a smooth transaction.
- Students can check myWSU to determine eligibility. Compare the amount of Total Assistance listed against your Cost of Attendance. If your Total Assistance is less than your Cost of Attendance, you have eligibility that can be made up in the form of a private loan.
- Students may also contact Student Financial Services to determine their eligibility for additional private loan funding.
- Students may apply for a private loan through the lender of their choice. Student must be the primary borrower on the loan, although many lenders will require a co-borrower.
- Once the credit check for the student and co-signer (if applicable) is approved, the lender will send a request for certification to our office. Student Financial Services will certify the private loan for an amount no more than the unmet cost of attendance.
Private Loan Laws
By law, private lenders must obtain a completed and signed self-certification form from each private loan borrower. This form, available from all private education loan lenders, or from WSU, requires the student to provide:
- Cost of attendance (COA) for the enrollment period covered by the loan
- Any estimated financial assistance (EFA) for the period of enrollment covered by the loan
- The difference between the COA and the EFA
WSU students can easily locate this information by logging onto myWSU and selecting Main Menu > Self Service > Campus Finances > View Financial Aid followed by selecting the proper school year. For accurate information, students are advised to be certain they are viewing the current academic term budget.
The law also requires lenders to provide student borrowers with three specific disclosure forms:
- Application disclosure: Provides general information about the range of rates, fees and other terms that apply; includes information on federal loan options.
- Approval disclosure: Presented when a lender is prepared to make an approved or conditionally-approved offer; states the acceptance date deadline (of at least 30 days) and describes how the borrower may accept the terms of the loan; with few exceptions, prohibits lenders from changing the terms of the loan during the acceptance period.
- Final disclosure: Presented to the borrower once the loan has been accepted and 10 business days before the loan can be disbursed; must clearly provide a borrower’s Right to Cancel Notice and state both the cancellation deadline and the acceptable method of cancellation.
It costs money to borrow money. Before accepting any loan, determine how much you’ll be able to afford to repay by estimating:
- What you can expect to earn after graduation
- What your monthly loan payments will be
- How much you must have for other living expenses
Borrow only what you can comfortably repay within that budget.
Know the true cost of your loans by keeping track of how much you borrow as well as the additional amount you owe in interest and other fees. If possible, pay the interest on unsubsidized loans to avoid capitalization. Also, keep in mind that the longer you take to repay your loans, the more interest you will pay.
Loan amounts & limits
Private/alternative loan amounts can vary widely. Private loans cannot be certified for amounts in excess of a student’s cost of attendance (COA) or budget.
Therefore, applicants must be certain there is sufficient room in their student budget to allow for an additional loan. For some students this may mean cancelling a Graduate PLUS or Parent PLUS Loan in advance of applying for the alternative loan. Failure to do so could delay the alternative loan process, because there is no eligibility for the private loan until the existing PLUS loan is canceled or rejected.
Please note that private and alternative loans are subject to credit requirements.
Loan periods must match WSU’s regular academic terms. If you will be enrolling for the fall and spring semesters, complete your loan application for an academic year loan. If you enroll only for the fall or spring semester, you may request a loan for that period. Summer is always applied for as a separate term.
WSU can not certify a loan for a calendar year (January to December) or for a 12-month period of any combination.
Private education loan products
The Private Lender Search Tool link below includes lenders with competitive private education loan products. These loan products generally offer borrower benefits and rates that could potentially lower the total cost of the loan for the borrower, and are able to process loans in the most efficient, accurate, and timely manner.
Borrowers are strongly encouraged to conduct their own research on the various private loan products. You can select any lender of your choice and are not required to use the lenders on the Private Lender Search Tool. Once you are in the Private Lender Search Tool, you will begin by selecting your program (undergraduate, graduate, etc).
Each of these lenders has unique qualification requirements, including enrollment, allowable costs, and co-signer criteria. Interest rates and terms of these loans may change at any time, so be sure you have up-to-date information before applying.
Please be aware, however, that if your lender of choice does not participate in, or is not familiar with WSU’s loan process, the disbursement of the loan funds could be delayed as a result of that lender’s process.