- Federal Student Loans – A federal student loan allows students and their parents to borrow money to help pay for college through loan programs supported by the federal government. They usually have low interest rates because they are capped by the government. The most common type of federal student loans are Stafford and PLUS loans.
- Subsidized Stafford loans provide low interest rates and are available to students who demonstrate financial need based on income and other information provided on the Free Application for Federal Student Aid (FAFSA). A credit check is not required to receive these loans. The federal government pays the interest on these loans until six months after the student is no longer enrolled in school at least half time.
- Unsubsidized Stafford loans provide low interest rates and are available to all students regardless of financial need (although the FAFSA still must be filed). A credit check is not required to receive these loans. The student is responsible for the interest, which may be paid while the student is in school or accrued and then added to the principal balance when the student enters repayment, which occurs six months after the student is no longer enrolled in school at least half time.
- PLUS Loans can be obtained by parents to help pay the cost of education for their children. (Graduate students may obtain PLUS loans to help pay for their own education.) PLUS loans require a credit check and, in some instances, an eligible cosigner. Repayment of PLUS loans begins following the final disbursement for the year. Graduate students may be able to defer repayment of their PLUS loans until after the student is no longer enrolled in school at least half time, although interest will continue to accrue.
- Private Student Loans – Private student loans are meant to help students fill the funding gaps that federal aid can leave behind. Private loans should only be used when all other federal aid and low-cost sources of funding have been exhausted. Unlike Stafford loans, private student loans are held in the name of the student and often require a co-signer. They are issued by private lenders and are not guaranteed or subsidized by the government. Instead, the interest rate is based on the student’s credit and/or the credit of any co-signers they have on the loan.
- Fill out the FAFSA online at www.fafsa.ed.gov. Please note that even though the FAFSA form is not part of the Credit Union Student Choice Loan application process it is required for the school certification process of the loan. Please consult your school's financial aid office if you need further assistance when completing the FAFSA.
- Find out what scholarships you may be eligible for (check with your financial aid office for scholarship listings) and then apply for as many as you can. Free money is always best so make sure you fully research scholarships and grants—you may be surprised at how many scholarships are available! While many will not pay for your entire tuition, every little bit you don’t have to borrow helps.
- Take the maximum amount of Federal Stafford Loans before applying for alternative loans. These loans are the most student-friendly. The government caps the interest rates and pays the interest for students on subsidized loans while in school.
- Choose a lender carefully if an alternative or private student loan is required. Ask questions and look at interest rates, origination costs and terms carefully. This is a long-term relationship and this loan will need to be repaid once you graduate or withdraw from school. Evansville Federal Credit Union is proud to partner with Credit Union Student Choice in offering certified private student loans.
- Verify your enrollment
- Ensure that the amount you have requested meets your financial need based on the school’s cost of attendance and the other financial aid you’ve received
- Indicate when the loan funds should be dispersed
After the loan has been certified, the funds will be disbursed directly to your school. If funding is sent by check, the check will be made co-payable to the school and student, and the student will be contacted by the school (normally through their school e-mail address) to endorse the check for deposit into their student account. If funding is sent electronically, the deposit will be handled directly by the school. For any excess funds that may remain after your direct school-related costs are paid, the school will issue a refund to you so that you may buy books or pay for other education expenses (such as off-campus room & board).
- Room and Board
- Other Related Expenses
- Full deferment of principal and interest*
- Interest-only monthly payments
- Principal and interest monthly payments
*During deferment, interest on the loan will accrue. Mandatory repayment begins six months after the student graduates or separates from the school. Please note that unpaid interest will be capitalized at the end of the 6-month grace period and added to the original principal balance. Monthly payment is based on final loan balance and repayment choices.
- Straight repayment over 20 or 25 years. If the loan balance is under $40,000 the loan repayment period is 20 years. If the loan balance is above $40,000 the loan repayment period is 25 years. or
- Graduated repayment for two years. The graduated repayment option temporarily lowers monthly payments by amortizing the first two repayment years over a 40 year period and then over either 18 or 23 years for the remainder of the loan, depending on the loan balance as described above.
- 680 minimum FICO (Fair Isaac Credit O – credit score)
- $18,000 minimum annual salary
- 45% debt-to-income ratio maximum
- No bankruptcies, judgments, or student loan defaults
Q. How do I apply for a Student Choice private loan?