Private Student Loans
Private loan programs are non-federal educational loans through a private lender that allows students to borrow additional funds after federal student aid has been exhausted. Students should apply for a private loan with a creditworthy co-signor to ensure the best rates, terms, approvals.
Each lender has different eligibility requirements, interest rates, fees, and repayment terms. For example, some lenders may require students to be enrolled at least half-time in a degree granting program, while different lenders may lend to a student that is non-degree or enrolled less than half-time. Some lenders require payments while students are still in school. Private loans cannot be consolidated with federal loans for payment purposes.
IMPORTANT:
- It is in your best interest to borrow the maximum amount of federal student loans before you borrow from a private lender.
- Do not apply too early. Each lender has an expiration date on the credit check and your application will not be certified until after you are registered for classes and have been packaged for all federal and state financial aid.
- A separate loan application is required for the summer term and for each academic year.
You have the right to select the private lender of your choice. The following link for ELM Select is a private loan search engine where you can search and compare different lenders and loan products. Neither Shepherd University nor the Office of Financial Aid intends any specific endorsement of these lenders.
Compare Federal Parent (PLUS) loans and Private Student loans:
| Federal Direct Parent PLUS Loan | Private student loans | |
| Eligibility | ||
| Borrower | Parent | Student and cosigner (if required); cosigner can be parent, relative, or willing sponsor |
| Enrollment | At least half-time and degree seeking | Full-time, half-time, less than half-time; degree seeking depending on lender; past due option may be available depending on lender |
| Credit Requirements | Credit check required; approval determined by federal criteria and is not based on credit score; additional unsubsidized loan may be awarded to dependent undergraduate student based on credit denial | Credit check required; approval determined by lender criteria based on credit score, credit history, and income (if credit-worthy applicant or cosigner required) dependent undergraduate students are likely to need a credit-worthy cosigner |
| Annual loan limit | May borrow up to the cost of education less other aid received | May borrow up to the cost of education less other aid received |
| Aggregate loan limit | None | Amount depends on lender |
| Cost | ||
| Interest rates | 7.54% fixed | Fixed and/or variable interest rate options available depending on lender |
| Origination Fees | 4.228% (beginning Oct. 1, 2022) | Fees may or may not apply depending on lender |
| Borrower benefits | 0.25% interest rate reduction for electronic debit account repayment | Borrower benefits available to reduce interest rates and overall loan costs; check with lender for availability and types of benefits available; cosigner release option; check with lender for availability and eligibility |
| Repayment | ||
| Servicer | U.S. Department of Education | Determined by lender contracted services |
| Repayment terms | 10 year repayment; May request deferment of payment while in school; 6 month grace period | Typically 15-25 years; determined by lender |
| Grace period | See “Repayment terms” | 6-to-9 month grace period after enrollment ends depending on lender |
| Loan consolidation | Can be consolidated with other federal education loans (i.e., Perkins and Stafford) through the Federal Direct Loan Consolidation Program | Private loan consolidation may be available; check with lender for availability |
| Loan forgiveness options | Loan forgiven in the event of permanent disability or death of student; Public Service Loan Forgiveness | Loan may be forgiven in the event of permanent disability or death of student; check with lenders for availability |
| Repayment options | Various repayment options available, including graduated, standard, and extended; Deferment and forbearance available | Standard and interest-only options as well as forbearance options may be available; check with lender for specifics |
What’s The Bottom Line For Students And Families?
All students should make an informed decision before deciding on a loan.
- Each family’s situation is unique.
- Applying for multiple credit-based student loans (rate shopping) in a 30-day window is treated as one inquiry when determining a credit score.*
- Applying for a private student loan does not impact ones eligibility for a Direct PLUS Loan.
- All approved Direct PLUS Loan borrowers receive the same interest rate of 7.54% and origination fees of 4.228%. The interest rate and origination fees for private loans will vary depending on the lender and the credit rating of the borrower or cosigner.
*Source: myFICO.com
Online Enrollment Verifications Are Available Now!
Also Available: Check Your Loan Deferment Status Online!
RAIL offers enrollment verification for loan companies. This free self-service option is based on an agreement between Shepherd University and the National Student Loan Clearinghouse (NSLC), which already provides enrollment and degree verification for Shepherd University as well as for most colleges and universities nationwide.
Log on to RAIL
Click on “Student Services and Financial Aid”
Click on “Student Records”
Click on “Request Enrollment Verification”
Click on “Request Enrollment Verification for (your name).” (This step will send you to another secure website.)
Click on “Obtain an Enrollment Certificate”
View and/or print your enrollment verification certificate.