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Financial Aid

Private Education Loans

General Information
Code of Conduct
Key Points to Keep in Mind when Choosing a Lender
Steps to Complete to Secure a Private Loan at CWU

General Information

Private Education or Alternative Loans can be used, under certain circumstances, when a student must exceed his or her annual or aggregate federal loan limits, is suspended from receiving federal financial aid or owes a past due balance from a previous term. We recommend that you consider private or alternative loans only after you have borrowed the maximum amounts allowed through the federal student loan programs. Parents should also carefully compare the Federal Parent PLUS Loan before considering a private education loan. If you still feel you need to borrow from a private lender, you’ll need to look beyond the lender’s marketing materials to compare private loan options.

Private Loan Code of Conduct

Click on the link to review CWU's Student Loan Code of Conduct

Key Points to Keep in Mind when Choosing a Private Lender

A.Most private loans offer a VARIABLE interest rate tied to either the LIBOR or PRIME financial rates. The interest rate and fees you pay on a private loan are based on your credit score and the credit score of your co-signer, if any. You can see the current indexes (LIBOR/PRIME) by going to: www.moneycafe.com/library/primerate.htm.
  
B.Usually, you will get a better interest rate if you have a credit worthy cosigner, even if you could qualify for the loan on your own. Typically, the lowest rates are only offered to borrowers with exceptional credit who also have a credit worthy cosigner. It is unclear how many borrowers actually qualify for these rates, so read the fine print when you are approved for a Private Education Loan from a Private Lender.
  
C.

Private Education Loans are counted toward your Financial Aid package and must be reported to CWU’s Financial Aid Office. You can use a private loan to replace any unmet Cost of Attendance (COA). If you request a private loan that is more than your COA minus other aid we are required to reduce the private loan accordingly. Federal regulations now require a student borrower to “self-certify” their COA by completing a Self Certification form. You can determine your annual COA by navigating to page 5. To determine your unmet COA subtract all Federal/ State Grants, Loans, Private/ Institutional Scholarships and Waivers from your annual COA figure. The difference is the amount of a private loan you would be eligible to receive. Please keep in mind that most lenders will not process a loan for less than $1,000.

Example:

Annual COA for In-State Undergraduate                                       $22,785
Total Amount of Federal/ State/ Institutional Aid                          - $18,000
(Can be found on the Financial Aid tab of your MyCWU account)


Amount of Private Loan Eligibility                                                    $4,785

  
D.Some lenders charge loan fees that can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees could cost more than a loan with a slightly higher interest rate and no fees. A loan that charges 3% in fees is about the same as a 1% higher interest rate.
  
E.It is important to ask the lender how often the interest is capitalized on the loan. Capitalization occurs when any unpaid interest charge is added back into the principal amount of the loan so that you will end up paying interest on the interest that has accrued on your original loan amount. The frequency of capitalization can affect the overall cost of the loan and can vary among the different lenders.

Steps to Complete to Secure a Private Loan at CWU

1.Compare a sample of lenders who offer Private Education loan:

http://beta.elmselect.com/link/query?schoolid=116. Elm Select provides comparative information on the private lenders used by CWU students.

2.Compare lender rates and fees to find the best fit for you.
3.Apply online with the lender of your choice.
4.Submit all required documentation to your lender, including the signed Promissory Note, any co-signer information, your Self-Certification form, and/or any other verification documentation.
5.Once you are approved, your lender will submit a request to us for certification. Please be advised that we will not process any private loan requests until you have been approved by a lender.
6.***IMPORTANT*** If this is your first private loan request at CWU, you MUST meet with a Financial Aid Counselor before your loan will be processed. Counselors are available on a drop-in basis from 9 am to 4 pm, Monday thru Friday in Barge Hall Room 115 or by calling 509-963-1611.
7.Once your loan is certified, please allow 2-3 weeks for the funds to be received by CWU and disbursed to your MyCWU account.

If you accept an educational loan that does not require school certification (commonly called "Direct to Consumer"), you will need to report the amount you borrow to the Financial Aid Office.