Student Loan FAQs
What is a Private Student Loan, and what are the benefits of having one?
Private Student Loans help pay for tuition, housing and other education expenses when financial aid runs out for each year you attend school at least half-time. There aren’t any fees or penalties for making early payments. Plus, there’s also a cosigner release option after the first 36 payments are made on time.
When should I apply for a Private Student Loan?
The best time to start your Private Student Loan application is in June as schools start processing requests during the summer months for the upcoming fall semester.
Remember, before applying for a private student loan, you’ll want to first apply for financial aid through FAFSA (Free Application for Federal Student Aid), and for every grant and scholarship you possibly can.
What's the difference between a Federal Student Loan and a Private Student Loan?
Federal student loans are fulfilled by the government, while private student loans are fulfilled by non-governmental financial institutions. Federal loan interest rates, terms and conditions are determined by law, and offer different types of repayment options such as income-driven repayment. Private loan interest rates, terms and conditions are determined by each financial institution, and are generally dependent on the individual and/or co-signer that is applying.
How often can the rate change?
Variable Rate: Quarterly (every three months)
Fixed Rate: Fixed for the life of the loan and does not change
Can I transfer my balance from a variable rate to a fixed rate (or vice versa)?
A borrower can refinance their loan balance from a variable rate to a fixed rate (or vice versa) by submitting a new loan application. The balance cannot be simply transferred from one loan type to another.
How long will it take to get my money when I apply for a Private Student Loan?
A typical Private Student Loan will take 2-4 weeks from the start of the application to the finish. This includes the review of the application, certification by the school, approval of Truth-in-Lending Disclosure, a Right of Rescission period, and processing time by the school. Note that times may vary and are often dependent upon the borrower or school. Funds are disbursed directly to the school. If a member is expecting a refund from the loan proceeds, their school will issue the refund to them in the manner the student set up with the school, either through ACH or paper check.
I go to school at UW-La Crosse. Am I eligible for this loan?
Yes. Any student who is enrolled at least half-time at any 4-year, public or private, not-for-profit school located in the U.S., Madison College or any UW Colleges campus is eligible for this loan. View a full list of schools.
How can a borrower make payments?
What is the major benefit of a Private Student Loan when compared to a Federal Direct PLUS Loan?
The cost. Similar to the PLUS Loan, our Private Student Loan offers a low, fixed rate. However, our loan has no additional fees. Fees for a PLUS loan equal a percentage of the total amount borrowed, which is withheld at disbursement.
Is the borrower or cosigner's credit score used to determine the rate of the loan?
If a borrower applies with a cosigner, the better of the two credit scores will be used to determine the rate of the loan.
Why is it important to complete a FAFSA, and when should it be completed?
It’s important to complete the Free Application for Federal Student AID (FAFSA) because the information provided is used to determine what federal and state grants or loans you may qualify for. It is required to receive federal, state or school-based aid. The deadline to complete a FAFSA depends on the school your are interested in. However, the availability of grants is limited, so it's best to submit the FAFSA as soon as possible. Get started at fafsa.ed.gov. Be sure to follow up with the school you plan to attend for information on their deadlines.
Who must complete the FAFSA?
Students and their parents must each complete a part of the FAFSA. It's a great opportunity for younger students to be involved in and learn the process.
Should I complete the FAFSA even if I don't think I’ll receive any grants?
Yes. Most students will at least qualify for an unsubsidized federal loan. These loans are not based on a family's financial need. Interest accrues from the date the loan is disbursed. There are also subsidized loans, which are based on financial need. If a student qualifies for a subsidized loan, the government covers the interest while the student is in school at least half-time.
How do I know how much money I’ll need?
Look up the cost of attendance on the websites of the schools you’re interested in attending. Subtract any federal aid and scholarships. The amount remaining is your out-of-pocket expense. Also, some schools’ financial aid websites offer cost of attendance calculators. If you need additional funds, we offer Private Student Loans, but be sure to exhaust federal aid first.
How long does it take to receive the award letter?
It usually takes about two weeks to receive the Student Aid Report, or SAR. The SAR is received after the Department of Education processes your FAFSA information, and a copy of the SAR is sent to any schools listed on your FAFSA. After a school receives your SAR, it can take approximately 2-4 weeks to process your information and generate an award letter. You can accept and reject portions of the financial aid package—pay attention to timelines and due dates the school may have.
Will parents have access to their student's financial aid account at school?
Colleges and universities won't discuss students’ information with parents without a release signed by the student. See your school's policy for more information.
When do students receive their funds?
Disbursements are not made until the semester starts. If a housing down payment is needed prior to the start of school, be sure to plan accordingly.
Student Loan Refinancing
What are some benefits of refinancing my student loans?
Refinancing your student loans can help you pay them off quicker. You could potentially lower your monthly payment, if that’s important to you. Lowering your interest rate or shortening your repayment term will result in paying less in interest. If you have multiple loans, having only one payment to manage each month can be achieved by refinancing. We offer terms to fit your situation—choose from a 5, 7, 10 or 15-year term.
How can I determine what I’ll save by refinancing?
We can help you calculate your savings, as well as give you estimates for all your options, to help you select the loan that best suits your budget. Simply stop by any UW Credit Union branch or contact us.
If you’re having budget challenges, you can also meet with a financial specialist for a no-cost Credit Consultation. During a Credit Consultation, we’ll review your full financial picture and look for ways to reduce payments and save interest on all your loans. Get started by booking a Credit Consultation.
What types of student loans am I able to refinance?
You can refinance private and federal student loans. Parents can also refinance PLUS loans, and children can refinance PLUS loans originally held by their parents. Keep in mind that if you choose to refinance federal student loans, you will lose the benefits associated with them, like the ability to defer payments if you go back to school and loan forgiveness through the Public Service Loan Forgiveness Program. If you have multiple student loans with different rates, you can decide to refinance only the higher rate loans.
What are some of the qualifications I should meet to refinance?
We ask for four years of credit history (not including student loans), a satisfactory credit score and the ability to comfortably afford the monthly payment. If you don’t have four years of credit history, you can also apply with a cosigner. A cosigner may also help you obtain a better interest rate, if you don’t have credit history.
What documents do I need, and what does the timeline look like?
You’ll need current student loan statements. We’ll confirm balances and verify where the payoff needs to be sent. It takes 2-4 weeks, on average, until your new loan is funded. It may take 1-2 weeks for your lender to process your payoff, so it’s possible that you’ll still have to make a payment to them before the payoff is processed. If this should occur, the lender sends the extra funds back to us to apply to your new loan as a refund.
Can I defer my payments if I return to school?
No, payments cannot be deferred if you return to school.
Family Private Student Loans
Who can apply for a Family Private Student Loan?
Borrowers are typically parents of students, but that is not a requirement. Anyone who meets the credit and eligibility requirements can take out a family loan, including grandparents, other family members and friends.
Why does the borrower have to provide the student's information on the application?
The application requires the borrower to provide the student’s information, which includes name, address, Social Security number, date of birth and school the student is attending. This is needed so we can confirm the student’s eligibility and enrollment, and coordinate sending the funds to the school.
When is a borrower required to begin repayment on a Family Private Student Loan?
Repayment begins approximately 30 days after the first disbursement. There is no deferment offered for the Family Loan. The minimum monthly payment is $50.
What are the eligibility requirements for a Family Private Student Loan?
An applicant must be the age of majority for the state in which they reside (age 18 in Wisconsin), be a U.S. citizen/national or permanent resident with a Social Security number and have satisfied the credit requirements at the time the loan is reviewed. The student on the application must have a Social Security number or ITIN and be enrolled at an eligible school at least half-time in a degree-seeking program.