Private Education Loans
Private or Alternative loans are just that, privately loaned from lenders outside federal loan borrowing through the filing of the Free Application of Federal Student Aid (FAFSA). Prospective borrowers may qualify for federal assistance and are encouraged to apply through the FAFSA first as the terms and conditions of a federal loan may be more favorable than the provisions of private education loans. Sometimes federal loans are not enough to cover all educational expenses or the student/parent may not be eligible for federal assistance. For this reason, there are private, credit-based loans available that may be used as a supplemental resource for paying college costs. Private or Alternative Loans require a separate application, credit check, multiple disclosures and a Self-Certification form.
Families should borrow only when absolutely necessary and only borrow what is needed. Williamson encourages serious and deliberate consideration be given to making any borrowing decision. Examine all options. Private loans, offered by individual lenders, require the borrower to have good credit. A co-signer may be required if you have less than two years of good credit history. Be advised that the interest rates are variable from lender to lender and are higher than those of Federal Direct Loans.
The Office of Financial Aid cannot certify any Private Education Loan until the student is enrolled in classes. In addition, the Office of Financial Aid will not certify any amount that takes the student over their cost of attendance.
The Higher Education Opportunity Act (HEOA) added a section to the Truth In Lending Act to require that before a private educational lender may consummate a private education loan for a student in attendance at an institution of higher education, the private education lender must obtain the completed and signed Self-Certification Form from the applicant. Information required by The Code of Federal Regulations regarding Truth In Lending can be obtained here 15 U.S.C. 1638(3) [12CFR226.47(a)]
The Consumer Financial Protection Bureau’s private student loan ombudsman may be able to assist you if you have concerns about your private student loan.
Williamson College has no preferred lender list and does not endorse any loan product or service. You may apply directly with any lender that you choose. Click here to learn more about the private lenders and the private/alternative loans offered for education.