How to Apply for Student Loans: Your Ultimate Guide

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Although they might have once been considered a last resort, student loans have now become almost a prerequisite for going to college. These days, it’s becoming rare to find someone who doesn’t need financial aid to pay tuition.

The data speaks for itself. In the 2016-2017 academic year, the average full-time undergraduate received $14,400 in financial aid, according to College Board’s Trends in Student Aid report. And Experian’s State of Student Loan Debt in 2017 report found that student loan borrowers carry an average of 3.7 loans each.

In short, if you think you need student loans to attend college, you’re not alone. But what you know before you apply can change everything. Here’s your ultimate guide on how to apply for a student loan.

5 steps to follow to apply for a student loan

The best thing to do to apply for student loans is to get going as soon as you can. Federal student loans of on a first-come, first-served basis, so you’ll have the most access to financial aid the earlier you apply.

What’s more, the first time applying could be a bit overwhelming, so the more you can get ahead of the game, the easier the whole process will be to handle.

1. Compile all the financial information you’ll need to apply for a student loan

To obtain federal student aid, you’ll have to fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA. As the name implies, the form is free and puts you in the running for financial aid for college, including federal student loans — making the whole application process easier, even if the form itself takes some time to fill out.

The FAFSA comes out in October each year, and you’ll need to apply the year before you’re planning on attending school — and then reapply each year until the year before you graduate.

Since there’s a lot of information on the form, it might be ideal to start compiling what you need in September. That way you’ll have everything you need to apply the day the application comes out.

Here’s a list of some of the financial information you’ll need from your parents — besides your info — to get ready for the FAFSA:

  • Your parents’ adjusted gross income for the two years prior to the academic year you’ll attend school.
  • Your parents’ tax returns from that same period.
  • If you file taxes, your tax returns from that same period.
  • Your parents’ Social Security numbers and dates of birth, as well as your own.
  • Whether or not your family receives Medicaid, Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Free or Reduced Price School Lunch, Temporary Assistance for Needy Families (TANF), or Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
  • Any untaxed income, such as child support, payments to tax-deferred pensions and retirement savings plans, and so on.
  • Assets and net worth of business or investments they or you might have.
  • A list of up to 10 schools you’re applying for.
  • Any grants or scholarships you’ve already received.

Think you shouldn’t have to use your parents’ information on the FAFSA? Even if your parents don’t intend to help you pay for college or you live on your own, you might still be required to include them. Use this infographic to find out for sure.

apply for student loan 1

Image credit: Studentaid.gov

Finally, if you want to see for yourself which questions might be asked on the FAFSA, here’s a worksheet provided by Federal Student Aid to help. Additionally, you can also use this guide to completing the FAFSA.

2. Use these forms to apply for student loans and free aid

As you can probably already see, the FAFSA is your only path to getting federal student loans. If you don’t fill out your FAFSA, you can’t get federal student aid for college.

However, there’s a lesser-known form that might be of use to you. It’s called the CSS Profile, and it helps you obtain institutional aid from specific colleges. You can fill this out to see if some of the colleges on your wish list offer aid to supplement what you get from the federal government.

What’s more, the CSS Profile also unlocks access to grants, not just loans. That means you might be able to take out even fewer loans for college, reducing the amount of debt you have to pay back.

But the CSS Profile isn’t free. There’s an initial $25 fee, plus an additional $16 for every school you add to the list (although there are also fee waivers for those who might qualify.) The questions on the profile are similar to those on the FAFSA, but the CSS Profile might go into more depth in some places.

An advantage of the CSS Profile is that colleges you thought were out of your reach financially could suddenly become a real option if you qualify for their aid. In that case, the small fee for the application might be worth it in the end.

3. Fill out the FAFSA and CSS Profile online

When it comes time to fill out your FAFSA and — if you so choose — your CSS Profile, it might be easiest to do it electronically.

You or your parents can register for access to the FAFSA through fafsa.gov. After you’ve registered, the entire FAFSA can be filled out online and even be edited later if necessary.

While you’re at it, you can skip some of the steps above by using the IRS Data Retrieval Tool to autofill much of the necessary financial information. However, it can’t hurt to gather the paperwork in advance anyway, just in case you run into issues using this tool.

And if you choose to fill out the CSS Profile, you can do so via the College Board. To make sure your desired colleges are included, review this list before you pay to fill out an application. For even more help, you can watch this tutorial before you fill out the CSS Profile to be sure you have everything you’ll need.

4. Review your Student Aid Report

After you fill out your FAFSA, you’ll receive what’s called a Student Aid Report, showing you a summary of all the information you’ve entered. It can take from three days to three weeks to get this report. It’s important to review it for accuracy as soon as possible and edit your FAFSA if necessary.

Remember, aid is first-come, first-served — don’t delay on fixing any errors that might exist on your FAFSA.

There might also be times when the school you included on your FAFSA selects you for verification. If that happens, you might simply need to prove extra documentation to confirm what you entered on your FAFSA. According to Federal Student Aid, this isn’t something to worry about — some schools might do this randomly, while others require it for everyone.

The most important thing is to provide whatever documentation you’re being asked for on time, as missing the deadline could mean not getting any federal financial aid.

5. Wait for your financial aid award letter

After completing your FAFSA, you’ll receive a financial aid award letter from the colleges you listed on the form. The timing on these letters can vary from college to college. However, if you’ve already received admissions acceptance from a college but no financial aid award letter, you can call their financial aid office to inquire about the letter’s status.

Your financial aid award letter will tell you everything you need to know regarding what you qualify for. If you qualify for grants or a work-study opportunity, for example, that information will be there. If you only received an offer for student loans, then you didn’t qualify for free aid.

Although each college formats award letters in their own way, here’s a sample to give you an idea of what to expect:

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Image credit: mefa.org

Among the loans offered to you, you might see a mixture of subsidized and unsubsidized loans. Subsidized loans don’t accrue interest while you’re in school, so it’s best to use those first. Here’s a chart to help you understand the order you should follow in accepting any aid you might qualify for:

apply for student loan 3

Image credit: studentaid.gov

Remember that you don’t have to take all the aid offered to you. Scholarships and grants don’t have to be repaid, but student loans do. Only take what you need, even if accepting more aid can give you a nicer lifestyle.

After all, considering the years it will take to repay the loans and all the interest that will accrue on them, you might find that the nicer lifestyle in college wasn’t worth it. Cover your tuition, room and board, and books. Then use part-time work for other living expenses if you want to keep your student loan debt as low as possible.

And if you received award letters from more than one school, you can use this tool from FinAid to compare them.

Once you know what school you’re going to and how much you want to accept in federal aid, including grants and loans, you’ll simply need to sign a promissory note for any loans you’re accepting. You might receive this in the form of paperwork to sign or be directed to Studentloans.gov to sign online.

How to evaluate private student loans when federal student loans aren’t enough

Unfortunately, there may be times when federal student loans come up short. Expected family contribution plays a big role in how much you’ll be approved for — whether or not your family can or will help you pay for your tuition.

If you need to fill the gap, private student loans can be an option (although you should very carefully consider the pros and cons before you act). Here’s what you need to know about this type of student loan.

1. How to apply for student loans from private lenders

Private student loans come from lenders outside of the government. You can apply for student loans directly through those lenders the same way you’d apply for many other types of loans. As a first step, check out our guide to how some of the top private student loan lenders stack up.

When you apply, there’s a good chance you’ll need a co-signer. That’s because, at your age, you probably haven’t had an opportunity to build credit or a solid income yet, two factors that determine your chances of approval for a loan.

You might seek out a parent or family member to become your co-signer, but know what you’re getting them into as well. If you default on your loan at any time in the future — even a few months away from total repayment — the loan will become their responsibility.

In other words, if you think the loan is too much for you ever to repay, don’t take it with a co-signer either.

2. How to compare offers

Let’s say you and a co-signer have applied for a few different private student loans to see which one gives you the best offer. What should you consider before choosing? Are interest rates the most important thing?

Currently, interest rates for private student loans range anywhere from just under 3% all the way to over 9%. That’s a wide range, but rates aren’t the only thing that matter. Here are a few other things to keep in mind:

  • Which lender offers you enough to fill your tuition gap?
  • Does the lender with the best offer also have benefits such as deferment or forbearance (which allow you to delay repayment)?
  • What do reviews of the lender have to say?
  • Finally, which lender offers you the lowest interest rate?

As much as this decision seems easy — choose the one with the best rate and loan amount, right? — don’t jump into your decision. This is a lender you’ll likely have a relationship with for one or two decades. Be sure they have good reviews, options to help if you hit some financial bumps in the road, and responsive customer service.

3. Caveats to be aware of with private student loans

Private student loans can seem like a miracle tool when federal student loans come up short, but they’re not without risks. Here are a few issues to be aware of before you take on a private loan.

  • Private student loans aren’t eligible for federal student loan forgiveness.
  • Private student loans don’t come with income-driven repayment plans.
  • Some private student loans have deferment or forbearance as an option, but this can vary by lender.
  • If you take on a private student loan with a variable interest rate, that rate can jump up at any time — remember you might be paying for 10 to 20 years, so that’s a definite risk.
  • Private student loans aren’t regulated by the government the way federal student loans are, which can mean fewer protections for the borrower.
  • Taking on a co-signer for a private student loan puts your co-signer’s finances at risk if you should ever pay late or default.

While these factors by no means have to be deal breakers, it’s crucial that you understand them before you choose to use private student loans. These are real financial products with real financial consequences (a fact that is also true of your federal student loans) — choose wisely.

Before you sign on the dotted line, see what you can get for free

There’s one important question to ask yourself before you apply for a student loan and accept one (or more): Have you done all you can to achieve free money for college?

Filling out your FAFSA is a great start to seeing what kind of federal scholarships, grants, and work-study programs you can qualify for, not just student loans. But don’t stop there. Here are a few more ways to get free money for college:

  • Apply for grants. You might find some specifically suited to your own situation, such as where you live or the subject you want to study.
  • Look for scholarships. You don’t have to be a star student to get a scholarship. You can find them based on activities you do, things you’re interested in, and even your heritage.
  • Search for colleges with the best financial aid. Some colleges pride themselves on being able to offer aid to students in need. Give them a try, even if you think they won’t be able to help you.

When it comes time to apply for a student loan, it’s easy to feel overwhelmed by the whole process. But simple things like gathering your financial information, getting your FAFSA in early, and applying for free money for college can go a long way.

And as you go through the process, keep this guide handy to revisit along the way.

Rebecca Safier contributed to this article.

Need a student loan?

Here are our top student loan lenders of 2018!
LenderVariable APREligibility 
1 Important Disclosures for CollegeAve.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, 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 11/1/2018. Variable interest rates may increase after consummation.


2 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 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.

3 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 11/01/2018 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 2.290%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 4.04% – 13.04%. Fixed rate loans have an APR range between 5.81% – 14.87%. 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 2.290%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 5.70% – 13.00%. Fixed rate loans have an APR range between 7.32% – 14.00%. 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.


* 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 PNC.

PNC Disclosures

  1. Interest will continue to accrue during periods of deferment. You will receive quarterly interest statements during this deferment period. Paying the interest as it accrues each quarter will save you money over the repayment term of the loan because any accrued interest that you do not pay will be added to the principal balance at the end of the deferment period.
  2. If automatic payment is discontinued, you will no longer receive an automatic payment discount. A federal regulation limits the number of transfers that may be made from a savings or money market account. Please contact your financial institution for more information on transfer limitations on savings accounts.
  3. A request to release a co-signer requires that you have made forty-eight (48) consecutive timely payments with no periods of forbearance or deferment within the forty-eight (48) month timeframe. “Timely payment” means each payment is made no later than the 15th day after the scheduled due date of the payment. “Consecutive payment” means the minimum monthly payment must be made for forty-eight (48) months straight without any interruption. To qualify for a co-signer release, the borrower must submit a request, meet the consecutive, timely payment requirements, provide proof of income and pass a credit check.

PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.


6 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. ©2018 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 (4) 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 11/01/2018. The current variable APRs for the program range from 4.123% APR to 13.126% 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 2.375% on 11/01/2018. 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 a 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 an 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 a 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.

7 Important Disclosures for LendKey.

LendKey Disclosures

Additional terms and conditions apply. For more details see LendKey


8 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.


9 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Student Loan 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 November 1, 2018, the one-month LIBOR rate is 2.29%. Variable interest rates range from 4.26% – 12.23% (4.26% – 12.13% 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 cosigner. Fixed interest rates range from 5.25% – 12.19% (5.25% – 12.09% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown requires application with a cosigner, 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. Multi-year approval funds available for future use are subject to a soft credit inquiry at time of your next request to verify continued eligibility. After we make the initial Loan to you, we may refuse to allow you to take out additional loans under the multi-year approval feature, terms and conditions will be outlined in your promissory note. Please Note: International students are not eligible to receive an offer for multi-year approval. Please Note: International Students are not eligible for the multi-year approval feature.
  3. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  4. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  5. 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.
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