Student Loans Process

Last updated on November 15, 2017

For most students, education loans are a necessary part of their financial aid package. Families must determine the amount of money to borrow for college expenses not covered by scholarships, grants, and family financial resources.

Below is a condensed list of recommended steps for determining the amount of money to borrow and for selecting and securing student education loans.

1. Review the Financial Aid Award Letter from the college you plan to attend.

2. Analyze the loans listed on the Financial Aid Award Letter; note their type and amount. Government loans (Perkins, Stafford, and PLUS loans) are preferred because they have attractive interest rates and good repayment options.

3. Input all financial information shown on your Financial Aid Award Letter, plus your family’s financial resources, into the Cost/Financial Aid Award Comparison:

4. If spreadsheet results indicate you have enough money from scholarships, grants, and family financial resources to cover all costs of attending college, then plan to DECLINE the loans listed on the Financial Aid Award Letter (and to accept the scholarships and grants offered).

5. If the results shown on the Cost/Financial Aid Award Comparison indicate you have enough money from scholarships, grants, family financial resources AND loans to cover all costs of attending a college, then evaluate the type(s) of loan(s) offered. If the terms of the loans offered on the Financial Aid Award Letter meet your needs, then plan to ACCEPT the loans listed (and the scholarships and grants).

6. If the results shown on the Cost/Financial Aid Award Comparison indicate you do NOT have enough money from scholarships, grants, family financial resources, and loans to cover all costs of attending college, then plan to ACCEPT scholarships, grants and loans (as per 5. above) listed on the Financial Aid Award Letter and seek private education/alternative education loans to cover the balance of money needed.

7. If your family wishes to apply for a private education/alternative education loan, contact your college’s financial aid office and ask if they have a preferred lender list.

8. Contact the preferred lender of your choice and evaluate the terms of private education/alternative education loans they offer (interest rates, loan fees, and repayment options).

9. Consider researching other lenders of private education/alternative education loans. Details regarding private student loans and a table of possible lenders are provided here: http://www.finaid.org/loans/privatestudentloans.phtml

10. When you decide on a lender for your private education/alternative education loan, the lender will attempt to prequalify you. Once you are prequalified for a loan, you will be required to complete and submit several documents, including a Master Promissory Note .