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Module 6 - Assignment 1

The document compares federal and private student loans, highlighting key differences such as payment schedules, interest rates, and eligibility for loan forgiveness. It also outlines the certification process for private loans at OSU, emphasizing the importance of planning ahead and the conditions under which loans can be certified. Additionally, it notes that private loans cannot be consolidated and may require a credit check and co-signer.

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4 views2 pages

Module 6 - Assignment 1

The document compares federal and private student loans, highlighting key differences such as payment schedules, interest rates, and eligibility for loan forgiveness. It also outlines the certification process for private loans at OSU, emphasizing the importance of planning ahead and the conditions under which loans can be certified. Additionally, it notes that private loans cannot be consolidated and may require a credit check and co-signer.

Uploaded by

parkjinyoung1308
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Module 6 – Assignment 1

Federal Loans Private Loans

1) Payments aren’t due until after you 1) Many private student loans require
graduate, leave school, or change your payments while you are still in school, but
enrollment status. In the case of Parent Plus some do allow you to defer (put off) payments
loans, the Parent can choose to put off the while in school.
payment until the student graduate, leave
school, or changes the enrollment status. 2) Private student loans can have variable or
fixed interest rates, which may be higher or
2) Interest Rate is fixed and much lower than lower than the rates on federal loans
private loans depending on student circumstances.

3) Subsidized federal loans are partly 3) Private student loans are not often
subsidized by the government. The interest subsidized and just like unsubsidized federal
rates are partly subsidized. loans the student is responsible for full
repayment
4) Except for PLUS loans credit checks are not
required 4) Require credit score and co-signer

5) Federal loans can be consolidated into a 5) Cannot be consolidated into one single loan
Direct Consolidation Loan
6) Students should check with your lender to
6) Can temporarily postpone or lower your find out about options for postponing or
Payments in case of trouble repaying lowering your loan payments.

7) Several Repayment Plans are available 7) Repayment options can differ from lender
to lender and must be checked with them
8) There is no prepayment penalty fee.
8) Students may need to make sure there are
9) There may be chance for students to be no prepayment penalty fees.
eligible for loan forgiveness
9) Although many private lenders do not offer
loan forgiveness programs, some student
loans from state agencies can be forgiven in
certain circumstances.
Private Loan Processing Information
Private student loans must be certified by the OSU and the certification process is as follows:
 The processing of the private loan request from the application to disbursement may
take ~4 to 6 weeks, so it is important to plan ahead.
 OSU can only certify private loans for an amount that fits into the remaining expected cost of
attendance i.e. original COA less any financial aid.
 OSU may certify the loan only if the student is enrolled for classes at least for the first term
of the loan period.
 A single private loan cannot be split up between more than one school year. If students need
funds split across multiple school years, the lender will need to send different loan
certifications for each year.
 If you will be enrolled less than full-time, students will need to complete an Enrollment
Revision form. This will inform OSU what your enrollment level will be each term in the
academic year you are attending.
 If the loan is certified and if the student does not enroll or drop all the courses for a 100%
refund, the private loan funds for the term will be returned to the lender and future
disbursements will be cancelled. OSU will also return funds when the student’s total
aid/resources exceed your estimated cost of attendance (known as an over-award).

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