- Section 5: Financial Aid
- Financial Aid
- Payment Deadlines and Policies
- Refund Policies
- Student Eligibility Requirements
- Financial Aid Application Process and FAFSA
- Financial Aid Cost of Attendance (COA)
- Financial Aid Deadlines
- Financial Aid Notifications
- Financial Aid Disbursement Process
- Finishing the Program and Repaying the Loans
- Federal Financial Aid Loan Limits
- Loan Default
- State Grant Aid
- Private Education Loans
- Other Considerations for Financial Aid
- Return of Unearned Tuition Assistance Funds
- Veteran Students Tuition and Fees Policy
Comparing Private Education Loans and Federal Loans
Private education loans may have significant disadvantages when compared with federal education loans. We strongly encourage students to first borrow any federal loans for which they are eligible. The chart below will help students in understanding the differences between federal and private education loan funds.
Comparison Chart of Federal and Private Education Loans
| Topic | Federal Loans | Private Loans |
|---|---|---|
| Credit Check Required? | Direct Loan: No Parent PLUS/Grad PLUS: Yes (limited) |
Yes |
| Credit Score or Debt-to-Income Considered? | Direct Loan: No Parent PLUS/Grad PLUS: No |
Yes |
| Co-Signer Required? | Direct Loan: No Parent PLUS/Grad PLUS: Depends on Credit Check Result |
Depends on Credit Check Result |
| Deferment Options | Several options | Depends on Lender |
| Grace Period | Direct Loan: 6 months | Depends on Lender |
|
Interest Rates* |
Undergraduate Subsidized and Unsubsidized Direct Loans:
Graduate Unsubsidized Direct Loans:
Direct PLUS Loans (Parent and Graduate/Professional):
|
Usually Variable |
| Loan Fees* |
Subsidized and Unsubsidized Direct Loans:
Direct PLUS Loans (Parent and Graduate/Professional):
|
Depends on Lender |
| Flexible Repayment Options | Many options available | Generally None |
| Loan Forgiveness Options | Several options available | Generally None |
| Penalties for Early Repayment | None | Depends on Lender |
*Rates adjust annually
Choosing a Private Education Loan
When choosing a private education loan, students should compare the loan terms offered by several lenders in order to choose the best fit for their situation. When choosing a lender, borrowers should make sure that Walden University is a participating school in their loan program. Visit ELMSelect to learn more about private loan eligibility requirements.
Several points that should be researched when considering a private education loan:
- What is the interest rate; is it fixed or variable? Is the rate capped?
- What fees must be paid for this loan and when are they paid?
- How will the student receive the loan funds?
- When does repayment begin and is there a grace period?
- What will student’s monthly payment be?
- What will be the total cost if the student uses the full repayment period?
- Are there penalties for early repayment?
- Are there deferment, forbearance, or cancellation options?
Most private education loan programs require the Office of Financial Aid to certify the student’s eligibility before approving the loan. If students receive financial aid, they must notify the Office of Financial Aid of any private education loans they borrow, as it may affect their aid eligibility.
Truth in Lending Act
Under the Federal Truth in Lending Act (TILA), the lender must provide the following documents:
- Private Education Loan Applicant Self-Certification Form: Students must complete this form and return it to the lender before receiving their first disbursement of loan funds.
-
Private Education Loan Right-to-Cancel Period: After the student signs the promissory note, the private lender will deliver a disclosure statement to confirm the terms and conditions of the private education loan. At the time that this disclosure is delivered, the “right-to-cancel” period begins. The student may cancel a private education loan, without penalty, until midnight of the third business day following the date on which the student receives the disclosure. The student may cancel the loan by contacting the lender. The lender cannot release the first disbursement of the loan funds until the end of the right-to-cancel period.