Private Education Loans
There are two categories of loans that may be used to supplement your financial aid package; private educational loans and the Federal Direct Parent PLUS Loan.
The Financial Aid Office recommends that students first apply for financial aid by filing the Free Application for Federal Student Aid (FAFSA). Filing the FAFSA will automatically allow students to be considered for federal student loans. We suggest that students utilize all of their federal loan options before pursuing a private educational loan.
To estimate your potential amount to finance through additional loans, you can use our Cost Estimator.
Federal Direct Parent PLUS Loan or Private Educational Loan?
A Federal Direct Parent PLUS Loan is an excellent option for families who need to borrow beyond the Federal Direct Loan limits. This fixed interest loan can be used by parents to borrow on behalf of dependent undergraduates who are enrolled on at least half-time basis (6 or more credits each semester). This loan cannot be used to pay prior term balances and must be processed during a term the student is currently enrolled on a half-time basis. A credit check is required and performed by the U.S. Department of Education. The interest rate on the Federal Direct Parent PLUS loan is 7.00%. This is a fixed interest rate for loans disbursed on or after July 1, 2017 through June 30, 2018 and is effective for the life of the loan. Students are required to have a current Free Application for Federal Student Aid (FAFSA) on file for their parent to apply for a Federal Direct Parent PLUS Loan.
The decision of whether or not to borrow additional loans and which program to use is a difficult one for some families. Before making the decision, the Undergraduate Financial Aid Office encourages families to consider the differences between the Federal Direct Parent PLUS Loan and other private educational loans.
To apply for a Federal Direct Parent PLUS Loan, please complete a Federal Direct Parent PLUS Application/Credit Authorization and return it to the Financial Aid Office.
The forms above are in PDF format. If you do not have Adobe's Acrobat Reader, please click here
Private Educational Loans
Private Educational Loans are commercial loans made by banks or other lenders to students. These loans are designed for students and offer rates and fees competitive to secured loans such as car loans or home mortgages, but are generally variable interest rate loans. Some lenders require that students are making Satisfactory Academic Progress as defined by the Department of Education, are enrolled at least half-time (6 credits each semester), or are currently enrolled. If you have been notified or have reason to believe that you are not meeting any of these requirements, please contact the lender before submitting an application to determine if you would be eligible for their loan product.
Approval of private educational student loans is based on a student's overall credit profile. Your history of repayment on prior credit obligations and your current use of credit determine your eligibility and the terms offered to you under these programs. A co-signer is generally required.
Federal regulations require lenders to provide multiple loan disclosures to borrowers, a Student Self Certification Form as well as additional time for borrowers to decline the loan once it has been approved. These new regulations will add significant time to loan processing and fund disbursement so it will be necessary to allow plenty of time when considering private loan options.
If you'd like to borrow a private educational loan you will need to apply with a lender. There are many things to consider when choosing a lender for your private loan. The link above provides information for unaffiliated lenders that we have determined provide students with funding stability, competitive interest rates, extended customer service hours of operation, borrowing options for non-traditional students, electronic funds transfer capability, and loans are held by the lender after origination The lenders noted therein are not specifically endorsed by St. Thomas. Furthermore, St. Thomas does not and cannot guarantee the lenders noted will provide the best borrower benefits to you. Remember, St. Thomas will process a private education loan from any lender you choose but it is your responsibility to research the options available to you.
Things to Consider When Researching Private Loan Lenders
The following is a summary of the information that may be helpful to parents and students when considering an private educational loan to help with student expenses not covered by federal aid.
Pay Attention to the Student Loan Landscape. The industry has undergone major changes and will likely continue to change in reaction to the economic instability. Pay close attention to notices lenders send you about their loan programs, interest rates, fees and repayment benefits. Remember, the obligation to repay student loans rests entirely with the borrower (and cosigner, if applicable), not the school. Please borrow responsibly.
Do Your Research. Lenders compete for your business and each lender offers its borrowers different benefits in order to differentiate its loan products from others in the marketplace. UST will process an alternative loan from any lender you choose. The standard repayment term for most private loans is 10 years so it is in your best interest to take the time now to make sure the lender you choose will meet your needs.