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.
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, 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.