Everything You Need to Know About College Loans

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In the 2016-17 school year, undergraduate students received an average of $4,620 in federal loans and graduate students received an average of $17,710 in federal loans, according to The College Board.

If you’re attending school now or will be soon, you might need to take out college loans of your own. Before you borrow, however, it’s a good idea to learn how student loan borrowing works.

Read on to find out everything you need to know to borrow money for school in an effective, affordable way.

Types of college loans

There are three primary options for college loans: federal student loans available to students; federal student loans available to parents; and private student loans available to either parents or students.

Federal student loans

Federal student loans have some significant advantages over private loans. As the Consumer Financial Protection Bureau explains, advantages of federal student loans include the following:

  • Federal loans provide more flexibility in repayment options in case of financial hardship. Loans can be put into deferment or forbearance so you can temporarily stop making payments.
  • All federal loans have fixed rates, while some private loans have variable interest rates. If interest rates are variable, interest — and cost of borrowing — can increase.
  • Interest on some federal loans is subsidized while you’re in school, which means you save money because interest doesn’t accrue while you get your education.
  • Interest rates for federal loans are set based on loan type, while interest rates for private loans vary based on your credit score and other factors.

There are limits on the amount that you can borrow from the federal government. If students have exhausted options for federal financial aid, parents will need to apply for either Direct PLUS Loans, which are federal loans for parents, or parents or students will need to apply for private loans.

Private student loans

Qualifying for private student loans is very different from qualifying for federal student loans. Private student loan lenders look at your income and credit score to determine if you qualify. If your income is too low, a private lender may not allow you to borrow. Because many students have low or no income, and because many students have not yet built credit, private loans may not be an option without a cosigner. If you can qualify, some of the advantages of private student loans, including:

  • The ability to obtain additional funding for school once you have exhausted your options for federal loans.
  • Private student loans are not restricted based on financial need as some federal loans, such as Direct Subsidized loans are.
  • Private student loans are available if you did not fill out theFree Application for Federal Student Aid (FAFSA).

You should consider private student loans only after you’ve exhausted options for federal student loans. Many different lenders offer private student loans, so you should comparison shop to find loans with the most favorable terms. Key criteria to consider when shopping for private loans include:

  • Eligibility requirements to qualify for the loan
  • Time to repay the loan
  • Loan application or origination fees
  • Interest rates

Our private student loan marketplace is an excellent place to start looking for private loans. You can find options for both undergraduates and graduate students. Parents can also apply directly for private student loans in their name, but their income and credit also affect eligibility.

Repaying private student loans can be more difficult for students and parents because there are problems with private student loan repayment options. Private student loans do not offer income-based repayment plans or loan forgiveness. And, while you can put federal student loans into deferment or forbearance if you experience financial hardship, this is not the case with private student loans.

Federal student loan options for undergraduates

Between the 2006-07 school year and the 2016-17 school year, federal loans to undergraduates increased by 23 percent, according to The College Board. Fortunately, there are many options for federal loans for students attending an undergraduate program, including:

  • Subsidized Stafford Loans. With subsidized loans, the government pays interest costs while the student is in school or if the student is in deferment.
  • Unsubsidized Stafford Loans. With unsubsidized loans, the student is responsible for paying interest. Interest can continue to accrue while the student is in school, in deferment or in forbearance.

Stafford Loans are also called Direct Subsidized Loans and Direct Unsubsidized Loans. This chart shows the limits for Direct Loans available to undergrads and grad students.

Year Dependent Students (except those whose parents cannot obtain PLUS Loans) Independent Students
(and dependent undergrads whose parents can’t obtain PLUS Loans)
First-Year Undergraduate Loan Limit Up to $5,500.
A maximum of $3,500 can be in subsidized loans.
Up to $9,500.
A maximum of $3,500 can be in subsidized loans.
Second-Year Undergraduate Annual Loan Limit Up to $6,500.
A maximum of $4,500 can be in subsidized loans.
Up to $10,500.
A maximum of $4,500 can be in subsidized loans.
Third-Year & Beyond Undergraduate Annual Loan Limit Up to $7,500.
A maximum of $5,500 can be in subsidized loans.
Up to $12,500.
A maximum of $45,500 can be in subsidized loans.
Graduate or Professional Students Annual Loan Limit Does not apply.
All graduate and professional students are independent.
Up to $20,500.
None can be subsidized.
Subsidized & Unsubsidized
Aggregate Loan Limit
Up to $31,000.
A maximum of $23,000 can be in subsidized loans.
Up to $57,500 for undergraduates or $138,500 for graduates or professional students.
A maximum of $23,000 of loans can be subsidized for undergraduates.
A maximum of $65,000 of loans can be subsidized for graduate or professional students, with the aggregate limit including federal loans received as an undergrad.

Source: Department of Education

Undergraduates used to have access to another option, Perkins Loans, but the Perkins Loans program has expired.

Parents can also borrow for undergraduates using Direct PLUS Loans, which are also available from the federal government. The maximum loan amount is equal to the cost of attendance minus other financial aid.

Both parents and students could also potentially take out private loans to pay for an undergraduate education. However, as mentioned above, undergraduates may have trouble qualifying without a cosigner.

How do student loans work for graduate school or professional school?

For students attending graduate school or professional school, there are different options for loans. Federal student loans for graduate or professional school include:

  • Direct Unsubsidized Loans. Eligible students may borrow up to $20,500 per school year, according to the Department of Education. Additional loans may be available for certain students enrolled in health profession programs.
  • Direct PLUS loans. Students may borrow up to the cost of attendance, minus other financial aid. A credit check is performed.

Graduate and professional students can also apply for private student loans to cover additional costs for their education. Because graduate and professional students may have had the chance to establish credit and may have more income than undergraduate students, they may be able to qualify for private loans more easily than undergrads.

How do students apply for federal loans?

To apply for federal loans, students will need to complete the FAFSA. You can complete your FAFSA online at the FAFSA website or can request a paper FAFSA by calling 1-800-4-FED-AID. You usually should try to complete the FAFSA in October when it becomes available because aid may be limited and you could lose out if you wait.

To complete the FAFSA, you will need to provide information about your income and your parent’s income, details about investments and assets, details about the schools you are applying to, and information about other sources of college funds such as scholarships and grants. You can check out our ultimate guide to filling out the FAFSA to find more information.

How does federal student loan interest work?

When you borrow money to go to school, you’ll pay interest. Interest rates for federal loans are set based on loan type. This chart shows the current interest rates for federal student loans.

Loan Type Borrower Type School Year
2016-17
School Year
2017-18
Direct Subsidized Undergraduate 3.76% 4.45%
Direct Unsubsidized Undergraduate 3.76% 4.45%
Direct Unsubsidized Graduate/Professional 5.31% 6.00%
Direct Grad PLUS Graduate/Professional 6.31% 7.00%
Direct Parent PLUS Parent 6.31% 7.00%

Interest rates are fixed for federal loans, so they will not change after you have accepted the loan. Interest rates are not based on your credit score, so everyone who applies will get the same interest rate.

Interest rates for private loans, on the other hand, vary by lender and can be impacted based on your credit score and other factors, including the length of your loan term. Average student loan rates for private loans are around 7%, and higher interest rates mean it will cost you more money to repay your loans. On the other hand, repaying your loan faster will reduce the total amount of interest that you must pay.

How are federal college loans paid back?

Repayment on Direct Loans is not required while you are in school or for six months after graduation, according to the Department of Education. However, PLUS Loans enter repayment as soon as they are dispersed, unless you apply for deferment. Parents can complete this Parent PLUS Loan Borrower Deferment Request form to request a deferment.

Once you graduate and begin repayment, you have different student loan repayment options. This table from the Department of Education shows different repayment options for different loan types.

Repayment Plan Eligible Loans Monthly Payment and Time Frame Eligibility and Other Information
Standard Repayment Plan Direct Subsidized and Unsubsidized LoansSubsidized and Unsubsidized Federal Stafford Loans
all PLUS loans
all Consolidation Loans (Direct or FFEL)
Payments are a fixed amount.
Up to 10 years (up to 30 years for Consolidation Loans).
All borrowers are eligible for this plan.
You’ll pay less over time than under other plans.
Graduated Repayment Plan Direct Subsidized and Unsubsidized Loans
Subsidized and Unsubsidized Federal Stafford Loans
all PLUS loans
all Consolidation Loans (Direct or FFEL)
Payments are lower at first and then increase, usually every two years.
Up to 10 years (up to 30 years for Consolidation Loans).
All borrowers are eligible for this plan.
You’ll pay more over time than under the 10-year Standard Plan.
Extended Repayment Plan Direct Subsidized and Unsubsidized Loans
Subsidized and Unsubsidized Federal Stafford Loans
all PLUS loans
all Consolidation Loans (Direct or FFEL)
Payments may be fixed or graduated.
Up to 25 years.
If you’re a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.
If you’re a FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans.
Your monthly payments will be lower than under the 10-year Standard Plan or the Graduated Repayment Plan.
You’ll pay more over time than under the 10-year Standard Plan.
Revised Pay As You Earn Repayment Plan (REPAYE) Direct Subsidized and Unsubsidized Loans
Direct PLUS loans made to students
Direct Consolidation Loans that do not include PLUS loans (Direct or FFEL) made to parents
Your monthly payments will be 10 percent of discretionary income.
Payments are recalculated each year and are based on your updated income and family size.
If you’re married, both your and your spouse’s income or loan debt will be considered, whether taxes are filed jointly or separately (with limited exceptions).
Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 or 25 years.
Any Direct Loan borrower with an eligible loan type may choose this plan.
You’ll usually pay more over time than under the 10-year Standard Plan.
You may have to pay income tax on any amount that is forgiven.
Good option for those seeking Public Service Loan Forgiveness (PSLF).
Pay As You Earn Repayment Plan (PAYE) Direct Subsidized and Unsubsidized Loans
Direct PLUS loans made to students
Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents
Your maximum monthly payments will be 10 percent of discretionary income.
Payments are recalculated each year and are based on your updated income and family size.
If you’re married, your spouse’s income or loan debt will be considered only if you file a joint tax return.
Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 years.
You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.
You must have a high debt relative to your income.
Your monthly payment will never be more than the 10-year Standard Plan amount.
You’ll pay more over time than under the 10-year Standard Plan.
You may have to pay income tax on any amount that is forgiven.Good option for those seeking Public Service Loan Forgiveness (PSLF).
Income-Based Repayment Plan (IBR) Direct Subsidized and Unsubsidized Loans
Subsidized and Unsubsidized Federal Stafford Loans
all PLUS loans made to students
Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents
Your monthly payments will be 10 or 15 percent of discretionary income.
Payments are recalculated each year and are based on your updated income and family size.
If you’re married, your spouse’s income or loan debt will be considered only if you file a joint tax return.
Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 or 25 years.
You may have to pay income tax on any amount that is forgiven.
You must have a high debt relative to your income.
Your monthly payment will never be more than the 10-year Standard Plan amount.
You’ll pay more over time than under the 10-year Standard Plan.
Good option for those seeking Public Service Loan Forgiveness (PSLF).
Income-Contingent Repayment Plan (ICR) Direct Subsidized and Unsubsidized Loans
Direct PLUS Loans made to students
Direct Consolidation Loans
Your monthly payment will be the lesser of 20 percent of discretionary income, or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.
Payments are recalculated each year and are based on your updated income, family size, and the total amount of your Direct Loans.
If you’re married, your spouse’s income or loan debt will be considered only if you file a joint tax return or you choose to repay your Direct Loans jointly with your spouse.
Any outstanding balance will be forgiven if you haven’t repaid your loan in full after 25 years.
Any Direct Loan borrower with an eligible loan type may choose this plan.
You’ll usually pay more over time than under the 10-year Standard Plan.
You may have to pay income tax on the amount that is forgiven.
Good option for those seeking Public Service Loan Forgiveness (PSLF).
Parent borrowers can access this plan by consolidating their Parent PLUS Loans into a Direct Consolidation Loan.
Income-Sensitive Repayment Plan Subsidized and Unsubsidized Federal Stafford Loans
FFEL PLUS Loans
FFEL Consolidation Loans
Your monthly payment is based on annual income.
Up to 15 years.
You’ll pay more over time than under the 10-year Standard Plan.
The formula for determining the monthly payment amount can vary from lender to lender.

Our guide showing average student loan payments under different repayment plans shows how these different repayment options could impact a typical student loan. You can also use our student loan payment calculator to find out what your payments would be with different repayment periods.

If you’ve taken out Parent PLUS loans, you have fewer options because Parent PLUS loans are not eligible for Income-Based Repayment or Pay-As-You-Earn programs. However, if parents consolidate through a Direct Loan Consolidation Loan, they can become eligible for an Income-Contingent Repayment Plan. You can learn more about different repayment options in our Parent PLUS loan repayment guide.

Private lenders each set their own rules for repayment of student loans so you will need to consult with your lender to find out what the repayment term is.

Now you know how college loans work

Now you know how college loans work so you can make an informed choice when you borrow money to go to school. Ideally, you should try to borrow the minimum you need to fund your education so it will be easier to repay your loans when you graduate.

The good news is, there are options to help you repay your student loans, so you should be able to fund your education and find a repayment plan that works for you.

Need a student loan?

Here are our top student loan lenders of 2019!
LenderVariable APREligibility 
1 Important Disclosures for Ascent.

Ascent Disclosures

Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.

  1. Ascent rates are effective as of 04/01/2019 and include a 0.25% discount applied when a borrower in repayment elects automatic debit payments via their personal checking account. Competitive rates calculated monthly at the time of loan approval.
    Ascent Tuition Cosigned Loan: Variable rate loans are based on a margin between 2.00% and 11.00% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent. The current LIBOR is 2.491%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 4.24% – 13.24%. Fixed rate loans have an APR range between 5.07% – 14.15%. For Ascent Tuition loan current rates and repayment examples visit www.AscentTuition.com/APR.
    Ascent Independent Non-Cosigned Loan: Variable rate loans are based on a margin between 4.00% and 12.50% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent. The current LIBOR is 2.491%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 5.88% – 13.16%. Fixed rate loans have an APR range between 6.69% – 13.45%. For Ascent Independent non-cosigned loan current rates and repayment examples visit www.AscentIndependent.com/APR.
  2. Payments may be deferred. Subject to lender discretion, forbearance and/or deferment options may be available for borrowers who are encountering financial distress.
  3. Making interest only or partial interest payments while in school will not reduce the principal balance of the loan. There are three (3) flexible in-school repayment options that include fully deferred, interest only and $25 minimum repayment.
  4. Flexible repayment plans may be offered up to a fifteen (15) year repayment term for a variable rate loan and ten (10) year repayment term for a fixed rate loan. Students must be enrolled at least half-time at an eligible school. Minimum loan amount is $2,000.
  5. Interest rate reduction of 0.25% for enrollment in automatic debit applies only when the borrower and/or cosigner signs up for automatic payments and the regularly scheduled, current amount due (including full, flat, or interest only payments, as applicable) is successfully deducted from the designated bank account each month. Interest rate reduction(s) will not apply during periods when no payment is due, including periods of In-School, Deferment, Grace or Forbearance. If you have two (2) returned payments for Nonsufficient Funds, we may cancel your automatic debit enrollment and you will lose the 0.25% interest rate reduction. You will then need to re-qualify and re-enroll in automatic debit payments to receive the 0.25% interest rate reduction.
  6. All applicants (individual and cosigner) are required to complete a brief online financial literacy course as part of the application process to be eligible for funding.
  7. Eligibility, loan amount and other loan terms are dependent on several factors, which may include: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Aggregate loan limits may apply. The cost of attendance is determined and certified by the educational institution.
  8. The legal age for entering into contracts is eighteen (18) years of age in every state except Alabama where it is nineteen (19) years old, Nebraska where it is nineteen (19) years old (only for wards of the state), and Mississippi and Puerto Rico where it is twenty-one (21) years old.
  9. 1% Cash Back Graduation Reward subject to terms and conditions. >Click here for details. In order to be eligible for the 1% Cash Back Graduation Reward, borrower must meet the following criteria after graduation:
    · The student borrower has graduated from the degree program that the loan was used to fund.
    · The student borrower may change majors and/or transfer to a different school, but must obtain the same level of degree (e.g. – undergraduate or graduate)
    · The graduation date is more than 90 days and less than five (5) years after the date of the loan’s first disbursement.
    · Any loan that the student has borrowed under the Ascent loan is not more than 30-days delinquent or in a default status as of the graduation date and until any Graduation Reward is paid.
  10. Students can apply to release their cosigner and continue with the loan in only their name after making the first 24 consecutive regularly scheduled full principal and interest payments on-time and meeting the other eligibility criteria to qualify for the loan without a cosigner.

* Application times vary depending on the applicants ability to supply the necessary information for submission.


2 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

  1. All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
  2. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
  3. As certified by your school and less any other financial aid you might receive. Minimum $1,000.

Information advertised valid as of 4/1/2019. Variable interest rates may increase after consummation.


3 Important Disclosures for Discover.

Discover Disclosures

  1. At least a 3.0 GPA (or equivalent) qualifies for a one-time cash reward of 1% of the loan amount of each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
  2. View Terms and Conditions at DiscoverStudentLoans.com/AutoDebitReward.

* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

5 Important Disclosures for SunTrust.

SunTrust Disclosures

Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.

Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.

SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.

  1. Interest rates and APRs (Annual Percentage Rates) depend upon (a) the student’s and cosigner’s (if applicable) credit histories, (b) the repayment option and repayment term selected, (c) the requested loan amount and (d) other information provided on the online loan application. If approved, applicants will be notified of the rate applicable to your loan. Rates and terms effective for applications received on or after 3/1/2019. The current variable APRs for the program range from 4.251% APR to 13.250% APR and the current fixed APRs for the program range from 5.351% APR to 14.051% APR (the low APRs within these ranges assume a 7-year $10,000 loan, with two disbursements and no deferment; the high APRs within these ranges assume a 15-year $10,000 loan with two disbursements). The variable interest rate for each calendar month is calculated by adding the current One-month LIBOR index to your margin. LIBOR stands for London Interbank Offered Rate. The One-month LIBOR is published in the Money Rates section of The Wall Street Journal (Eastern Edition). The One-month LIBOR index is captured on the 25th day of the immediately preceding calendar month (or if the 25th is not a business day, the next business day thereafter), and is rounded up to the nearest 1/8th of one percent. The current One-month LIBOR index is 2.500% on 3/1/2019. The variable interest rate will increase or decrease if the One-month LIBOR index changes. The fixed rate assigned to a loan will never change except as required by law or if you request and qualify for the auto pay discount.
  2. Any applicant who applies for a loan the month of, the month prior to, or the month after the student’s graduation date, as stated on the application or certified by the school, will only be offered the Immediate Repayment option. The student must be enrolled at least half-time to be eligible for the partial interest, fully deferred and interest only repayment options unless the loan is being used for a past due balance and the student is out of school. With the Full Deferment option, payments may be deferred while the student is enrolled at least half-time at an approved school and during the six month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date. The Partial Interest Repayment option (paying $25 per month during in-school deferment) is only available on loans of $5,000 or more. For payment examples, see footnote 7. With the Immediate Repayment option, the first payment of principal and interest will be due approximately 30-60 calendar days after the final disbursement date and the minimum monthly payment is $50.00. There are no prepayment penalties.
  3. The 15-year term and Partial Interest Repayment option (paying $25 per month during in-school deferment) are only available for loan amounts of $5,000 or more. Making interest only or partial interest payments while in school deferment (including the grace period) will not reduce the principal balance of the loan. Payment examples within this footnote assume a 45-month deferment period, a six-month grace period before entering repayment and the Partial Interest Repayment option. 7-year term: $10,000 loan disbursed over two transactions with a 7-year repayment term (84 months) and 8.468% APR would result in a monthly principal and interest payment of $199.90. 10-year term: $10,000 loan disbursed over two transactions with a 10-year repayment term (120 months) and 8.938% APR would result in a monthly principal and interest payment of $162.92. 15-year term: $10,000 loan disbursed over two transactions with a 15-year repayment term (180 months) and 9.423% APR would result in a monthly principal and interest payment of $136.90.
  4. The 2% principal reduction is based on the total dollar amount of all disbursements made, excluding any amounts that are reduced, cancelled, or returned. To receive this principal reduction, it must be requested from the servicer, the student borrower must have earned a bachelor’s degree or higher and proof of such graduation (e.g. copy of diploma, final transcript or letter on school letterhead) must be provided to the servicer. This reward is available once during the life of the loan, regardless of whether the student receives more than one degree.
  5. Earn an interest rate reduction for making automatic payments of principal and interest from a bank account (“auto pay discount”). Earn a 0.25% interest rate reduction when you auto pay from any bank account and an extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank checking, savings, or money market account. The auto pay discount will continue until (1) automatic deduction of payments is stopped (including during any deferment or forbearance) or (2) three automatic deductions are returned for insufficient funds during the life of the loan. The extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank account will be applied after the first automatic payment is successfully deducted and will be removed for the reasons stated above. In the event the auto pay discount is removed, the loan will accrue interest at the rate stated in your Credit Agreement. The auto pay discount is not available when payments are deferred or when the loan is in forbearance, even if payments are being made.
  6. A cosigner may be released from the loan upon request to the servicer provided that the student borrower is a U.S. citizen or permanent resident alien, has met credit criteria and met either one of the following payment conditions: (a) the first 36 consecutive monthly principal and interest payments have been made on-time (received by the servicer within 10 calendar days after their due date) or (b) the loan has not had any late payments and has been prepaid prior to the end of the first 36 months of scheduled principal and interest payments in an amount equal to the first 36 months of scheduled principal and interest payments (based on the monthly payment amount in effect when you make the most recent payment). As an example, if you have made 30 months of consecutive on-time payments, and then, based on the monthly payment amount in effect on the due date of your 31st consecutive monthly payment, you pay a lump sum equal to 6 months of payments, you will have satisfied the payment condition. Cosigner release may not be available if a loan is in forbearance.
  7. If the student dies after any part of the loan has been disbursed, and the loan has not been charged off due to non-payment or bankruptcy, then the outstanding balance will be forgiven if the servicer is informed of the student’s death and receives acceptable proof of death. If the student becomes totally and permanently disabled after any part of the loan has been disbursed and the loan has not been charged off due to non-payment or bankruptcy, the loan will be forgiven upon the servicer’s receipt and approval of a completed discharge application. If the student borrower dies or becomes totally and permanently disabled prior to the full disbursement of the loan, and the loan is forgiven, all future disbursements will be cancelled. Loan forgiveness for student death or disability is available at any point throughout the life of the loan.

6 Important Disclosures for LendKey.

LendKey Disclosures

Additional terms and conditions apply. For more details see LendKey


7 Important Disclosures for CommonBond.

CommonBond Disclosures

A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.

Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.

Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
If you are unable to pay your government loan, the government can refer your loan to a collection agency or sue you for the unpaid amount. In addition, the government has special powers to collect the loan, such as taking your tax refund and applying it to your loan balance.

A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If you refinance your government loan, your new lender will use the proceeds of your new loan to pay off your government loan. Private student loan lenders do not have to honor any of the benefits that apply to government loans. Because your government loan will be gone after refinancing, you will lose any benefits that apply to that loan. If you are an active-duty service member, your new loan will not be eligible for service member benefits. Most importantly, once you refinance your government loan, you will not able to reinstate your government loan if you become dissatisfied with the terms of your private student loan.

If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you are a borrower with a secure job, emergency savings, strong credit and are unlikely to need any of the options available to distressed borrowers of government loans, a refinance of your government loans into a private student loan may be attractive to you. You should consider the costs and benefits of refinancing carefully before you refinance.

If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.

Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.


8 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2019, the one-month LIBOR rate is 2.48%. Variable interest rates range from 4.45%-12.42% (4.45%-12.32% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 5.74%-12.19% (5.74% – 12.09% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
  2. Graduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2019, the one-month LIBOR rate is 2.48%. Variable interest rates range from 4.45% – 12.18% (4.45% – 11.82% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 5.74% – 11.95% (5.74% – 11.65% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. You will be presented with an Application Disclosure and an Approval Disclosure within the application process before you accept the terms and conditions of your loan.
  3. Citizens One Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens One reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens One Student Loans private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens One Student Loans-participating school. Please Note: International Students are not eligible for the multi-year approval feature.
  4. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply. Borrowers whose loans were funded prior to reaching the age of majority may not be eligible for co-signer release. Note: co-signer release is not available on the Student Loan for Parents or Education Refinance Loan for Parents.
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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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