Private student loans

Students who need additional funds for education, beyond what was awarded on their financial aid offer, might consider a private student loan. These loans are from a lender and are not guaranteed by the federal government. Approval of a private student loan is based on creditworthiness. Most students will require a co-signer.

The student should file a Free Application for Federal Student Aid (FAFSA) to determine eligibility for federal and state aid before applying for a private student loan.

Important information to consider before choosing a private student loan expanding section
  1. Private student loans may have a variable interest rate.
  2. There is usually no cap on how high the interest rate can go for a variable interest rate loan. 
  3. Interest accrues the entire time the student is in school and in their grace period. 
  4. Some lenders include origination and/or repayment fees. 
  5. The loan is in the student's name but usually a co-signer is required. The co-signer bears equal responsibility for loan repayment. 
  6. Not all lenders offer deferment or forbearance options once the loan has entered repayment. 
  7. If a student were to choose a private student loan offered by a credit union, they may wish to confirm whether they must be a member of the credit union to receive this loan. Some credit unions require a small deposit in order to be a member (usually from $5 to $25). Others will automatically make you a member with no deposit if you borrow a student loan through them.
  8. Contact the lender if there are additional questions. 
Application procedures and information about specific private student loans expanding section

Students may choose any lender for their private student loans. The entire process, from application to disbursement, will generally take three weeks.

1. Check out our list of lenders

Apply online. Students will go through several pages of information before coming to a list of lenders that students at UWL have used in the past.

2. Compare lenders

Students can click on up to five lenders and hit the compare button to have a side by side comparison of the loans.

3. Apply

Once the student has chosen a private student loan, they can actually apply by clicking the "Apply" button on the information page.

4. Specify the loan period

Students will need to indicate a loan period. For fall, put September through December. For the entire academic year, put September to May. If the student elects for an academic year disbursement, half will disburse in fall and the other half will disburse in spring.

5. Interest rate

The interest rate and fees that will be associated with the loan chosen will be determined by the lender after a review of credit. Most lenders will require a co-signer.

6. How much to borrow

Borrowing the maximum amount available can often result in the student receiving a rather large refund after paying their university charges. For assistance with determining a precise amount to borrow, use our "Calculating how much you need to borrow for college" handout. The maximum that can be borrowed is indicated on the student's offer as "Your Other Loan Eligibility".

Part-time enrollment expanding section
  • Most lenders who offer private student loans require the student to be at least half-time (six credits for undergraduate students, five credits for graduate students).
  • Of the lenders typically used by UWL students, two lenders (Sallie Mae and Wells Fargo) allow students to be less than half-time when applying.
Health professions private student loans expanding section
  • Certain private student loans are only available to students who have been ADMITTED to an approved allied health program (PT, PA, OT, RT, NMT, NA, Clinical Lab Science).
  • Pre-professional majors do NOT qualify.
  • The UWL Financial Office will not be able to certify a health professions loan for students not admitted to one of these programs.
Minnesota Student Educational Loan Fund (SELF) Program expanding section
  • The Minnesota SELF Loan helps students who need assistance in paying for education beyond high school. Loan eligibility is not based on need.
  • To be eligible for the SELF program, a student must be a Minnesota resident who maintains satisfactory academic progress, is enrolled at least half-time in a degree seeking program, and is attending an eligible institution.
  • In addition, the student must have a credit worthy co-signer and not be delinquent or in default on a SELF or other outstanding student loans.
  • Borrowers are required to pay interest quarterly while in school. After graduating or leaving school, the student enters repayment.
  • The interest rate charged to the borrower changes throughout the life of the loan and can change every three months.
  • SELF Loan applicants are required to complete SELF Loan Entrance Loan Counseling.
  • For more information visit the Minnesota Higher Education Coordinating Board (www.selfloan.org)

Minnesota SELF Loan Annual Loan Limit: 
Undergraduate $10,000 per grade level 
Graduate $10,000 per year 
Minnesota SELF Loan Cumulative Loan Limit: 
Undergraduate $50,000 
Graduate $70,000 including undergraduate SELF

Tips for selecting a co-signer (or endorser) expanding section

Most private student loans require borrowers to apply with a co-signer, who promises to repay the loan if the student borrower fails to do so. There are times that PLUS and Graduate PLUS borrowers will need an endorser, which is much like a co-signer.

Here are several tips borrowers should keep in mind when requesting that someone be a co-signer or endorser:

  • Select an individual who you are close to and who is also financially stable. Many people will ask their immediate family members. Some people will ask extended family members, close friends, or even trusted colleagues who are supportive of your higher education goals.
  • Review the reasons for needing the loans. Talk with the potential co-signer about academic career plans. Review the cost of attending the chosen academic program and review other sources of financial aid, such as scholarships and grants, as well as sources of cash from savings or from income.
  • Ensure that the student has exhausted all other federal loan options. The potential co-signer may not be aware of the federal loan limits on federal Direct Loans. Discuss the terms, conditions, and loan limits of all existing federal loans, noting these loans are fixed-rate, government-backed loans that do not require a co-signer.
  • Review the loan amount. Does the amount seem too high or too low? Adjust where appropriate, and remember that borrowing less, whenever possible, is always a good decision.
  • Make sure the potential co-signer understands what is expected. Run some numbers to get a feel for what the monthly payments will be. Remember to account for additional borrowing over multiple years.
  • Discuss when payments will start. For federal Direct PLUS Loans, the first payment is due 60 days after the loan is fully disbursed unless the borrower requested a deferral while the student is enrolled at least half-time or up to six months after the student ceases to be at least half-time. For Graduate PLUS Loans, payments may be postponed until until after graduation or drop below half-time status. Many private student loans begin repayment six months after leaving school. Students may wish to contact the co-signer the month prior to when repayment begins to discuss the repayment plan.
  • Complete the loan application together. Co-signers may feel more invested in the process if they participate in the application process online or via phone. Applying at the same time can ensure  information provided directly to the lender are correct.
  • Talk about the potential of a co-signer release, if applicable. Some private student loans offer co-signer release options. For instance, some co-signers may be released from the financial responsibility of a loan if the borrower has successfully completed school and made 12-48 consecutive on-time principal and interest payments. Make certain to confirm the terms and conditions of the release with the lender.