A Private education loan or alternative loan is a nonfederal loan issued by a lender such as a bank or a credit union for the purposes of financing postsecondary expenses.
Private loans should be viewed as a loan of last resort since they traditionally do not offer the same benefits of federally funded student loans in terms of interest rates, fees and repayment options.
Private loans like all loans must be repaid. Dowling College does not recommend any specific private lenders and encourages all students and their families to carefully consider all available financing options first before considering a private loan.
The Higher Education Act of 2008 sought to protect student loan consumers and amended the Truth in Lending Act (TILA) and established disclosure requirements for private education loans. (Regulation Z)
As a result of this change all private lenders are required to collect from an applicant a self certification form before a private loan can be processed. The form is designed to remind students about other sources of financial assistance and federal loan options. The form seeks to collect from the student their cost of attendance and expected financial assistance at Dowling College. This information will be used by the lender as part of the eligibility determination process.
Private Loan Process
Step 1: Select a Lender
Students need to do their home work and research lenders to see what lender offers them the best options in terms of interest rates, fees, repayment options and disbursement options (check or EFT)
It is important to note that some lenders require students to immediately go into repayment and untimely payments can affect future disbursements. Meaning loans disbursed in the fall for which monthly timely payments are not made can jeopardize a spring disbursement of that loan regardless of original approval.
Step 2: Download and complete Self Certification Form.
- To calculate your cost of attendance you can use the attached figures or if you have filed a FAFSA you can log on to view your financial aid awards online and obtain the required information from the “Award Package by Aid Year”. Click here for standard cost of attendance information.
- To calculate your tuition cost go to our Tuition Information web page or log onto your account and view your term bill and use it to estimate the tuition cost related to the term of your loan.
- Your estimated financial assistance is available on the “Award Package by Aid Year” page of your personal account.
The Cost of Attendance information provided is based on standard enrollments: full time for undergraduate students, part time for graduate students based on current classification in school. If you know you will be attending school part time or full time you must calculate and adjust your cost of attendance using the budget information provided.
Students who plan on filing a FAFSA should do so before applying for a private loan so that they have an estimate of their financial assistance.
Step 3: Complete the Application Process
Complete the application, submit self certification form and any other required paper work to lender, authorize a credit check and if approved sign promissory note.
Keep the following in mind when applying for your private loan:
- Carefully consider the loan period. Students should select a period that corresponds to the schools academic year. Since eligibility is tied to a credit check if a loan is needed for the full year it is advisable to apply for the loan for the full academic year rather than apply for a loan for the fall and then reapply for a loan for the spring. Remember the spring portion, if not needed, can be cancelled or returned.
- The loan amount you are certified for will be divided equally among the terms for which your private loan was applied for and approved
- Maximum eligibility is your Cost of Attendance, which includes tuition, fees, and living expenses minus the other financial aid you are receiving.
- Dowling College will only deduct private loans from a student’s bill when they are “approved”, meaning that the credit is acceptable or “ready for school certification”, promissory note has been signed, and any documentation required by the lender and college has been submitted. The lender will notify Dowling College when the loan is approved.
Step 4: School Certification
Once the loan has been approved Dowling College will receive notification directly from the lender that the loan has been approved and that school certification is requested. Since these loans are designed by the lenders for educational purposes they require certification that the student is enrolled in a postsecondary institution. Traditionally they also require the school to certify the class level and credit enrollment and anticipated graduation date of the borrower.
Step 5: Disbursement of Loan
Loans will be disbursed according to the disclosure statement from lender.
If you choose a lender that does not disburse funds via Electronic Funds Transfer ( EFT), then a paper check will be issued to Dowling College and the student. The paper check will require endorsement from the borrower before funds will be credited to the student’s account. The Financial Aid Department will notify students if they need to endorse a paper check.
We encourage students to ask their lender about having their loan disbursed EFT since this expedites the payment process. Most disbursement dates are timed to reflect the start dates of each semester.
Direct to Consumer Loans:
Dowling College does not encourage students to apply for Direct to Consumer Loans because the terms tend to be less favorable than private loans certified by the school. The loan amount is not automatically deducted from your bill nor can a temporary credit be placed on the account for the amount of the loan. The loan amount will be posted to your account once payment is received. Please keep in mind that Direct to Consumer Loans are counted as a financial resource and must be disclosed by the student to Dowling College.