The Office of Financial Aid strongly encourages students and families to carefully weigh the need for loans and to borrow only what they actually need, as loans must be repaid with interest. To learn more about the loans available to you, please visit:
The Federal Government is the biggest lender of educational loans, but there are private lenders as well. The Federal Direct Loan program has loan options for both students and parents of dependent students. In order for the student to be eligible for federal loans, a must be submitted. Private loan borrowers are not required to submit a FAFSA, but we recommend doing so as the terms and conditions of the federal loans may be more favorable to the student than a private loan.
Responsible Borrowing
老九品茶 and the Office of Financial Aid urge student borrowers and their families to carefully consider whether they need to borrow and only to borrow the minimum amount needed. Loan balances can quickly add up over the years and borrowers must keep in mind from day one the obligation to repay and whether the borrower will have the resources to pay back the loans.
Required Loan Disclosures (SB 1289)
Students considering student loans need to be aware of the differences between federal student loans and private student loans:
- Federal student loans are required by law to provide a range of flexible repayment options including income-based and income-contingent repayment plans, as well as loan forgiveness benefits that private lenders are not required to provide.
- Federal direct loans are available to most students regardless of income. Other qualification criteria do apply. For more information, please visit .
- Private student loan lenders can offer variable interest rates that can increase or decrease over time, depending on market conditions.
- The interest rate on a private loan may depend on the borrower's and/or co-signer's credit rating.
- Private student loans have a range of interest rates and fees and students should determine the interest rate of, and any fees associated with, the private student loan included in their financial aid award package before accepting the loan.
- Students should contact the lender of the private student loan or their university campus' financial aid office if they have any questions about a private student loan.
Borrowers should compare the terms and conditions of any loans carefully to make sure the loan is the best fit for their financial situation. By law, borrowers of federal loans are guaranteed certain flexible repayment options and loan forgiveness benefits that private lenders are not required to provide. Here are some other key points to consider when comparing federal loans with private loans.
Co-signer Required?
Stafford Loan: No.
Graduate PLUS Loan: Usually no.
Parent PLUS Loan: Usually No.
Private Loan: Usually yes.
Credit Check Required?
Stafford Loan: No.
Graduate PLUS Loan: Yes (credit history only).
Parent PLUS Loan: Yes (credit history only).
Private Loan: Yes (full credit check including credit score and credit history).
Deferment Options
Federal Loans: Several options guaranteed by law.
Private Loans: Depends on the lender.
Grace Period
Federal Loans: 6 months (Parent borrowers must opt-in).
Private Loans: Depends on the lender.
Interest Rate
Federal Loans: Fixed APR, rate set annually.
Private Loans: Fixed or variable, rate based on credit check.
Loan Fees
Stafford Loan: Approx. 1%
Graduate PLUS Loan: Approx. 4%
Parent PLUS Loan: Approx. 4%
Private Loans: Depends on the lender
Loan Forgiveness Options
Federal Loans: Several Options guaranteed by law.
Private Loans: Generally none
Penalties for Early Repayment
Federal Loans: None
Private Loans: Depends on the lender
Regardless of whether a loan is borrowed from the Federal Government or a private lender, all loans must be repaid. The only question is when or how long it will take. Federal loan borrowers have the option to defer payment while the student is enrolled and for 6 months after the student drops below half-time enrollment (by taking less units, graduating, taking a leave of absence, or withdrawing from the University). During this time, the student is not required to make payment (although it's recommended that you do!) Once the deferment and grace period end, repayment of the principal will begin. By law, federal loans have a number of flexible repayment plans, but the standard repayment plan takes place over the course of 10 years (120 payments). For information regarding the other repayment plans, please visit or contact your .
On the other hand, most private lenders are not required to offer deferment or flexible repayment options. Most lenders do not offer loans with deferment, although some may offer the option. If deferment is not offered, repayment would begin immediately upon disbursement of the loan.Typically, the repayment plan is set and cannot be changed. Borrowers would need to contact their lender for any additional information.
You do not have to accept either federal or private loans after they are awarded to you. You also have the right to cancel or reduce the amount of any federal loan at any time before the loan disburses. Private loans generally function in the same manner, but please check with your lender for any specific policies regarding cancellation. Once a loan has disbursed, students have up to 30 days from the date the Office of Financial Aid sent notification that the loan has disbursed to cancel. You are required to accept or decline any federal loans prior to disbursement in . You may decline a private loan or reduce the amount of any type of loan by emailing the Office of Financial Aid.
After the end of their grace period, all borrowers of federal student loans must begin repayment. Careful management and planning for repayment helps ensure you fulfill your obligation and avoid default. All federal student loans can be tracked at the National Student Loan Data System where you can see each loan you have borrowed, the principal balance remaining, and who your Loan Servicer is.
The Loan Servicer is the entity assigned by the Federal Government to handle the customer service, billing, and collection of your federal loans. Please contact your Servicer for any issues related to repayment.
To help manage your repayment, your Loan Servicer can help identify which repayment plan is the best for your financial situation. If you run into financial difficulties, your Loan Servicer can help place your loans into a period of temporary deferment or forbearance where no payments are required.