Hobart and William Smith Colleges

Borrowers who are interested in obtaining private education loans may qualify for federal student loans and/or other assistance under Title IV of the Higher Education Act and should apply for such federal aid before applying for a private education loan. The terms and conditions of loans made, insured, or guaranteed under Title IV of the Higher Education Act may be more favorable than the provisions of private education loans.

Private education loans are not subsidized by the federal government. Eligibility for a private education loan is determined by the lender based on the creditworthiness of the student borrower and/or co-borrower. These loans are to be used for education-related expenses only and should supplement, not replace, federal student loans and federal aid programs. The amount of a private education loan is limited to the cost of attendance less any other aid received, including federal and state grants, loans, and scholarships.

Private loans…

• Are in the student’s name
• Require credit approval
• Have fixed and/or variable interest rates
• May be deferred
• Often allow a 6-month grace period before students begin repaying
• Must be accounted for in the student’s aid package

Before pursuing a private loan, we recommend that you compare its features to the Federal [parent] PLUS Loan (and state educational loans for residents of select states). Bear in mind that the PLUS Loan interest rate is fixed at 9.08% and there is a 4.228% loan origination fee deducted from the amount requested prior to disbursement.

GENERAL PRIVATE LOAN PROVISIONS

Borrowers: Private education loans are typically student only loans; however, there are private education loans that parents may borrow on behalf of the student to pay towards their educational expenses. Cosigners are often required for undergraduate students as they do not always meet the credit and/or income requirements.

Eligibility Requirements: Applicant must be 18 years of age, a U.S. citizen or eligible non-citizen, enrolled at least half-time in a degree program, creditworthy or apply with a creditworthy cosigner.

Borrowing limits: To determine the maximum amount you are eligible to borrow in a private education loan, take your cost of attendance minus any other financial aid, and the balance is the amount you may be eligible to borrow. The minimum loan amount can range from $1,000- $2,000.

Interest Rate: Private student loans may offer variable or fixed interest rates, which can be higher or lower than the federal loan rates, depending on your circumstances. Factors such as creditworthiness, income, and employment history play a role in determining the interest rate. Additionally, elements like the loan’s repayment term and the presence of a cosigner can also influence the rate. Generally, loans with longer repayment periods may result in higher interest rates.  Before committing to a private student loan, it is essential to conduct thorough research and compare interest rates offered by different lenders to ensure you secure the best terms for your situation.

REPAYMENT

The repayment term can range from 5 to 15 years, depending on the amount borrowed. Some lenders may offer longer repayment terms. While you are enrolled in school, lenders may offer different repayment options, such as:

• Interest only payments
• Deferral of both principal and interest
• Full principal and interest payments
• A fixed monthly payment while in school

These options provide flexibility during your studies, allowing you to choose the repayment plan that best suits your financial situation.

APPLICATION PROCEDURES

For most private loan programs, students must annually complete an application for each academic year. The loan application may be completed online at the lender’s website.

CHOOSING A LENDER

You may borrow from any lender of your choice. We strongly recommend researching and comparing multiple student loan lenders, as loan terms and conditions can vary significantly. The loan application process is typically completed directly with your chosen lender, usually through their website. Once your credit is approved, the lender will forward your loan request to Hobart and William Smith Colleges for certification of eligibility.