Private Education Loans
Private education loans are another option to help students pay for costs not covered by other aid they've received. These are nonfederal loans by a lender, such as a bank, credit union, or state agency, and have terms and conditions set by the lender.
We strongly suggest that students and their families exhaust their federal student loan options, including Federal Parent PLUS Loans, before borrowing a private loan. The federal government makes federal student loans with terms and conditions set by law. Federal loans have fixed interest rates, future payment postponement possibilities, loan forgiveness options, various repayment plans, and loan consolidation. For more information on federal loans versus private loans, please visit studentaid.gov.
Private loans often have stricter eligibility requirements and can differ by lender and loan type. Lenders often require a good credit score and may require a co-signer.
Like federal student loans, private loans must be paid back. Repayment is made directly to the lender. Each lender offers their own repayment options.
Students and families must research their options before choosing a lender that best fits their needs. Before borrowing, be sure to understand fully:
- The terms of the loan.
- What the interest rate is, and how will it be calculated?
- Any fees associated with the loan.
- The terms of repayment.
- The lender's requirements to borrow money.
- Does the lender require students to be meeting satisfactory academic progress?
- Does the lender require students to be enrolled at least half-time?
- Does the lender require students to be enrolled in a degree-seeking program?
- What is the minimum amount required to borrow funds?
Private Loan Process at Salem State
- The Financial Aid Office will not certify a student's private loan until their file with the lender is 100 percent complete. Borrowers should verify with their lender that all required documents and disclosures have been received.
- A private loan cannot be certified above the student's cost of attendance. Therefore, our office may reduce the loan amount you requested from your lender if a student receives other financial aid or the requested loan amount exceeds their attendance cost.
- Estimated COA - Other Financial Aid Received = Amount of Private Loan.
- For example, suppose the estimated cost of attendance is $22,000, and the student will receive $10,000 in other financial aid (including Federal Direct Loans, grants, or scholarships). In that case, a student may borrow up to $12,000 for the academic year.
- After receiving a private loan certification request, it will be processed in approximately seven to ten business days, or longer, depending on the time of year, before it appears on a student's account.
- The lender will disburse funds to Salem State within eight to ten business days from the date the borrower receives the Loan Consummation Disclosure Statement.
- Federal regulations prohibit lenders and schools from disbursing funds until the right-to-cancel period has passed.
- When financial aid funds, including private loans, are disbursed, any outstanding balances owed to the university are paid first. If there are any excess funds after the balance has been paid, a refund will be generated. Refunds either be directly deposited into the student's checking or savings account or mailed to the student at their permanent address on file with Salem State within two weeks. The Student Accounts Office is responsible for applying funds to a student's account and issuing student refunds.
- Quickly reply to any message from the lender or Salem State. Additional information may be needed before the loan can be processed.
- Ensure your personal information at Salem State matches the information you provide to the lender.
- For example, be sure your Social Security Number is the same on file with Salem State as the lender.
Students apply directly through the lender and can choose any lender they wish. To find a private loan, students may use ELM Select*. ELM Select is an excellent tool for students to determine which lender and loan product is right for them.
Students can compare lenders side-by-side to see which lender is best for them. ELM Select allows students to sort:
- Alphabetically by lender
- Annual percentage rates (APR) and;
- Fixed and variable interest rates.
An advanced Sort and Filter feature allows students to search by:
- Repayment type
- Enrollment status
- Satisfactory academic progress requirements and;
- If a lender provides for past-due balance certification.
If a student has questions about a lender or a loan type, it is best to contact the lender for more specific information.
*This list shows lenders who have provided private loans to students from Salem State. Please be advised that Salem State University does not recommend or promote any lender. It is up to the student to decide which lender they would like to borrow from for their private loan.
A private loan can only be processed and disbursed within the terms listed below. The certifiable loan terms are:
- Two Term Loans
- Fall/Spring (within the same academic year)
- If a loan is certified for both the Fall and Spring terms, the first half of the funds will disburse in the Fall term and the second half in the Spring term.
- One Term Loans
- Fall only
- Spring only
- Summer only.
- The Summer term is a separate term from the Fall/Spring term. If a student needs a private loan for the Summer term, they must apply for a separate loan.
- If your loan is certified for a single term, your private loan will be disbursed in one disbursement in that term.
If a student has a past-due balance from a previous term or year, they will need a borrow a separate private loan for that specific term or year to pay for it. The loan will only be certified for the amount owned for that term/year up to their remaining cost of attendance.
For example, if a student has a past-due balance from the Summer term and trying to return for the upcoming Fall term, they will need to apply for a Summer term loan to cover their balance from Summer.
Each lender has specific guidelines regarding past-due balance loan certification, and some do not allow past-due balance certification.
- Be sure to exhaust all other sources of financial aid first, including federal student loans.
- Research all possibilities for scholarships, grants, and work-study.
- Borrow only what you truly need.
- Estimate how much you will need to borrow for the entire school year.
- Learn how budgeting can help manage finances while attending college. Creating a budget and learning budgeting tips can help reduce expenses.
- Ask questions and compare different lenders' interest rates, loan fees, and repayment terms.
- Read all the terms and conditions before borrowing.
- Before borrowing any loan, we strongly advise students to review their charges, anticipated refunds, and financial situation. For information on bill and account activity, please visit:
- Annual Percentage Rate (APR) - The APR reflects the total cost of borrowing money over the life of the loan. The APR considers the interest rate, any loan fees, and the repayment length.
- Co-signer - A person who agrees to repay a loan with the primary borrower. This is usually a person the borrower knows well who agrees to take equal responsibility for the loan.
- Fixed Interest Rate - Interest will accrue at the same rate throughout the life of the loan. Once a borrower begins to pay their principal and interest, the monthly payments will not change.
- Variable Interest Rate - The interest rate is tied to current market interest rates and can increase or decrease over the life of the loan. This will impact monthly payment amounts; some months may be higher than in previous months.