Skip to Main Navigation
Skip to Main Content
 

Why borrow a Private Education Loan?

Students and parents should explore and exhaust their eligibility for loans offered by the federal government before considering a loan from a private lender. That being said, there are number of reasons why you might need to consider borrowing a Private Education Loan.

  • You are an international student attending UTD on a student visa and as such you are not eligible for federal or state financial aid programs
  • You are not eligible for federal financial aid because you have not met our standards of academic progress
  • You are attending UTD in a program that is not eligible for federal or state financial aid, such as a certificate program.

Before Considering a Private Education Loan

It is important that you pursue your best borrowing option. If you meet the eligibility requirements the federal student loan programs are almost always a better option than a Private Education Loan. The federal government provides more information regarding the two options here: federalstudentaid.ed.gov/federalaidfirst/index.html.

Private Education Loans

Private education loans are made by banks and other lending institutions to provide students with additional funding for unmet college expenses. These loans are issued based on the credit history of the borrower and/or co-borrower.

The federal government's Truth in Lending and Higher Education Opportunity Act of 2010 regulates the private education loan application process. The following are some of these rules.

  1. As an applicant, you will receive the application disclosure and self-certification* form from the lender. If you apply by phone, the application disclosure and self-certification form will be mailed. The self-certification form provides information about federal financial aid and encourages you to talk to the Office of Financial Aid if you have questions about the amount and type of loan you should be borrowing.
  1. If approved, you will receive the approval disclosure form from the lender detailing the approved loan amount, the interest rate and any origination fees.
  1. Once you have signed the approval disclosure form and the self-certification and promissory note are completed the forms are to be returned to the lender. The lender will then ask the school to certify the loan.
  1. During the school certification process the lender will send you a final disclosure form. This form must be completed and returned back to the lender before funds can be transmitted to the school.
  1. After your receipt of the Final Disclosure, the lender must provide you with a three day rescission period during which you may review your need for a private loan and have the right to cancel without penalty. Loan funds cannot be disbursed until after the end of the rescission period.

*To assist you in completing the self-certification form, cost of attendance estimates can be found on the Office of Financial Aid Estimated Costs of Attendance page.

Some lenders provide a paper application to the student with a section that is to be completed by the school. These applications should be submitted to the lender without the school's section completed. The lender will then contact the school electronically for the information needed to process the loan application. UT Dallas uses this process due to the volume of application received.

Private Lender Selection

You should research several lenders that will best meet your needs and circumstances before submitting an application. You are encouraged to compare loan programs based on:

  • Interest rates
  • origination fees
  • prepayment fees
  • annual and lifetime borrowing limits
  • repayment terms and grace periods
  • co-borrower requirements
  • citizenship status

You should review the loan program's general eligibility requirements to determine if the program meets your specific circumstances, such as:

•  Undergraduate or graduate student
•  UT Dallas admission status *
•  Enrollment level (i.e. less than half-time)
•  Satisfactory Academic Progress **

* Students enrolled in courses preparing for CPA Certification should apply for private loans that do not require school certification.

** Some lenders require that the school certify that the student is making academic progress towards a degree.

UT Dallas advises its students to first exhaust all possibilities for federal and state financial aid programs before seeking private loans. The Office of Financial Aid strongly suggests that you should always borrow conservatively and budget your expenses. For further information on financial management please visit our Financial Responsibility page.

Updated: July 7, 2011