What is a private student loan?
Private student loans are obtained through lending institutions and are not part of the federally guaranteed student loan programs. In most cases, federally guaranteed loan terms and conditions are more favorable than terms and conditions for private loans. Care should be taken when choosing to use private loans as a tool. It is important to remember that student loans of any kind must ultimately be repaid.
Students have used private loans to cover a recent or past balances, to fund school related travel abroad or to help with qualified living expenses not covered by their federal student loan eligibility. Application for private loans is initiated by the student through a lending institution of their choice. Southwestern maintains a comprehensive list of lenders our students have used in the past three years and is updated annually.
- Explore Lenders
- How are private loans different from Federal Direct Loans?
- What is the process to apply for a private loan?
- What is Southwestern's Loan Code of Conduct?
Southwestern partners with Great Lakes Higher Education Corporation to provide you with FASTChoice - a tool which will help you compare the loan products our students have historically used. Explore Now!
*Students have the right to choose any lender that offers a private student loan, even if it is not on our historical list.
Private loans do not carry a Federal guarantee like Federal Direct Loans and are subject to credit analysis. The interest rate and other terms of the loan may vary depending on the lending institution and the borrower's credit rating. Interest rates and loan fees are also rarely fixed which means that they can change at any time. Similar to the Federal Direct Loan program, the student may elect to make interest only payments on the loan while they are attending school.
The Financial Aid Team at Southwestern College recommends that you first exhaust all Federal loans options at your disposal before choosing private loans as an option. Once you have decided that private loans are necessary, you should then research the loan terms offered by lending institutions to determine if you are comfortable with them. Once you have chosen a lender, the steps to apply are:
- Complete the loan application located on the lender's website. Unless you have excellent personal credit, will most likely need a credit-worthy co-signer (parent, spouse, grandparent, other close relative) to sponsor your loan application. Co-signers are responsible for repaying the loan should the student fail to make timely payments.
- Application passes through credit analysis.
- Application is sent to the school for certification.
- Southwestern College verifies that the loan amount requested is within Federal guidelines.
- Student self-certifies the loan using the Private Education Loan Self Certification form.
- Once the self-certification form is received by the lender, the student and Southwestern must complete a minimum three day mandatory waiting period within which the borrower can cancel the loan.
- Funds arrive at Southwestern College.
The Office of Financial Aid abides by the Kansas Attorney General's Student Loan Code of Conduct which is:
Kansas Attorney General's Student Loan Code of Conduct
- Preferred Lender Guidelines - Preferred or suggested lender lists used by colleges will be based solely on the best interests of students and parents who may use the list and without regard to the financial interests of the college. (Southwestern does not have a preferred lender list.)
- Lender Disclosures - All preferred or suggested lender lists maintained by a college will clearly and fully disclose the criteria and process used to select the lenders included on such lists. Students and parents will also be told that they have the right and ability to select a lender of their choice, regardless of whether such lender appears on a school's lender list.
- Revenue Sharing - Colleges will not accept anything of value from any lender in exchange for any advantage sought by the lender. Lenders will not be required or allowed to pay to be placed on a school's preferred lender list.
- Gifts and Trips - College employees will not accept anything of more than nominal value from any lender. This includes gifts or trips of any kind.
- Advisory Board Membership - College employees will receive no compensation or anything of value for serving on the advisory board of any lender.
- Lender Identification - No employee of any lender may work in or provide staffing in a college financial aid office. In addition, colleges shall direct employees of lenders to clearly identify themselves as employees of the lender and to never identify themselves as college employees when meeting or speaking with students or parents.
In addition, Southwestern College is a member of the National Association of Student Financial Aid Administrators (NASFAA) and acts in accordance with NASFAA's Statement of Ethical Principles and Code of Conduct for Financial Aid Professionals.