Private loans can be expensive to take in place of Federal Student Loans for some borrowers. The Financial Aid Office cautions students to undergo research into all options and consider the cost of both types of loans. Federal loans have proven over the years to be cheaper and allow for more flexibility than loan taken from the private market. Compare the two side by side Click Here.
Alternative Private loans are available to assist students in need of financing for their education after all other aids possibilities are exhausted. Students are the primary responsibility holders and sometimes a cosigner, if required. The co-signer themselves should be aware that if the student doesn't make the payments that he/she will also be responsible for the loan payments. These loans can be taken out up to the Cost of Attendance after all other aid is subtracted.
Beginning February 14, 2010, by Federal Regulation, banks and lenders must provide students with several different disclosure and Certification forms before the loan can be disbursed. The form serves as a reminder that students should seek other aid first before considering a private loan. Loans will have to be confirmed by email or over the phone, if the student has any outstanding Stafford Loan Eligibility, as it is cheaper, by the IPFW Financial Aid Staff. These requirements do slow down the approval process for private loans. Each step can be moved along faster by timely responses to your lender requirements and obligations. Private loans will take a minimum of three weeks to complete from the time of the application.
Federal Regulation also requires that preferred lenders provide annual reports to schools regarding private education loans that are available to students. Disclosure statements are also provided by each bank to explain requirements and costs associated with every loan.