Private Education Loans | Salem State University

Private education loans are another option to help students pay for costs not covered by other aid they've received. These are nonfederal loans made by lenders, such as banks, credit unions, or state agencies, with terms and conditions set by the lender.

Private loans often have stricter eligibility requirements and can differ by lender and loan type. Lenders often require a good credit score and may require a co-signer.

Like federal student loans, private loans must be paid back. Repayment is made directly to the lender. Each lender offers their own repayment options.

A private loan cannot be certified above the student's cost of attendance (COA). Therefore, our office may reduce the loan amount requested with the lender if a student receives other financial aid or the requested loan amount exceeds the COA.

Estimated COA - Other Financial Aid Received = Amount of Private Loan.

For example, suppose the estimated cost of attendance is $22,000, and the student will receive $10,000 in other financial aid (including Federal Direct Loans, grants, or scholarships). In that case, a student may borrow up to $12,000 for the academic year.

We strongly suggest that students and their families exhaust their federal student loan options, including Federal Parent PLUS Loans, before borrowing a private loan. The federal government makes federal student loans with terms and conditions set by law. Federal loans have fixed interest rates, the option to postpone future payments, loan forgiveness options, various repayment plans, and loan consolidation. For more information on federal loans versus private loans, please visit studentaid.gov.

Students and families must research their options before choosing a lender that best fits their needs. Before borrowing, be sure to understand fully:

The terms of the loan.
What is the interest rate, and how will it be calculated?
Any fees associated with the loan.
The terms of repayment.
The lender's requirements for borrowing money.
- Does the lender require students to be meeting satisfactory academic progress?
- Does the lender require students to be enrolled at least half-time?
- Does the lender require students to be enrolled in a degree-seeking program?
- What is the minimum amount required to borrow funds?

Private Loan Process at Salem State

Students apply directly through the lender and can choose any lender they prefer. To find a private loan, students can use a tool called ELM Select*.

ELM Select allows the user to compare lenders side-by-side to find the best option and use the Loan Estimator to approximate their monthly payment and total cost for a private loan. Keep in mind that the actual total loan cost, monthly payment, and annual percentage rates may vary based on the information provided by students.

ELM Select allows users to sort and filter by:

Alphabetically by lender
Annual Percentage Rates (APR)
Repayment Type
Fixed and Variable Index (Interest) Rate Type
Enrollment Status
Satisfactory Academic Progress Requirements; and
Past Due Balances Applied

If you have any questions, please contact the lender directly for specific details.

Students must confirm with their lender that they have received all necessary documents and disclosures. They should respond promptly to messages from their lender or Salem State, as additional information might be needed to process their loans. Students should also ensure that their personal information at Salem State matches the details they provide to their lender.

For example, they must ensure that the Social Security Number and name on file with Salem State match those on file with their lender.

Lenders send the certification request information to the Financial Aid Office. The Financial Aid Office will not certify a student's private loan until we receive the lender’s request.

Once a request is received, it typically takes about 7 to 10 business days to process before showing up on a student's account. Processing times may vary throughout the year.

For example, at the beginning of each major semester, time frames may be longer than later in the term.

*This list displays lenders who have provided private loans to Salem State students. Salem State University does not endorse or recommend any lender. It is the student's choice which lender they want to borrow from for their private loan.

Certifiable Loan Terms

Certifiable loan terms are:

Fall/Spring (same academic year),
Fall only
Spring only
Summer only
- The Summer term is separate from the Fall and Spring terms. If a student needs a private loan for the Summer term, they must apply for a separate loan.

That means that loans can only be processed and disbursed for these academic terms.

Two-Term Loans

A loan certified for the Fall and Spring terms will be disbursed in two halves: the first half of the funds will be disbursed in the Fall term, and the second half in the Spring term.

One Term Loans

A loan certified for a single term will be disbursed as a single disbursement in the requested term.

Past Due Balance Certification

Students with a past-due balance from a previous term or aid year must apply for a separate loan for that term or aid year.

The loan will be certified only for the amount owed for the term or aid year in which the balance is due, up to the remaining cost of attendance for that term or aid year, or the amount requested, whichever is less.

For example, if a student has a past-due balance from the Summer term and is trying to return for the upcoming Fall term, they will need to apply for a Summer term loan to cover that balance.

Each lender has specific guidelines for past-due balance loans, and some do not allow it. Contact the lender directly with any questions.

Disbursement and Refunds

Lenders are required to provide borrowers with a minimum 3-day rescission or “Right-to-Cancel” period after the final loan disclosure, the Loan Consummation Disclosure Statement, is sent to the borrower. Federal regulations prevent lenders and schools from disbursing funds until the right-to-cancel period has concluded.

The Right-to-Cancel period means that after Salem State has certified your loan and all disclosures are sent, there is a mandatory minimum of 3 business days before the lender can disburse loan funds to the school.

The private loan will be disbursed to a student’s account in approximately 5 to 7 business days after Salem State has received the funds from the lender.

When financial aid funds, including private loans, are disbursed, any outstanding balances owed to the university are paid first. If any excess funds remain after the balance is paid, a refund will be issued.

The Student Accounts Office applies funds to students' accounts and processes refunds. For more details on refunds, please visit the Student Accounts FAQ page.

Tips For Borrowing

Be sure to exhaust all other sources of financial aid, including scholarships, grants, work-study, and federal student loans, before applying for a private loan.

Before accepting any loans, we strongly advise students to review their current account activity, all charges on their account, anticipated refunds, and their financial situation. Borrow only what you truly need; estimate how much you will need to borrow for the entire school year.

Students may assign their parents or a guardian as an Authorized User on their TouchNet billing account. An Authorized User can view account activity, the current bill, and anticipated aid.

For information on tuition and fees, billing, and payment options, please visit the following:

Creating a budget and learning budgeting tips can help reduce expenses. Budgeting can also help manage finances while attending college.

Borrowing Terminology

Annual Percentage Rate (APR): The APR reflects the total cost of borrowing money over the life of the loan. It considers the interest rate, loan fees, and the repayment length.
Co-signer: A person who agrees to repay a loan with the primary borrower. This is usually a person the borrower knows well who agrees to take equal responsibility for the loan.
Degree Seeking Requirements: A list of conditions necessary to receive a student loan. This may include a minimum number of hours taken and the mandatory number of days in attendance.
Enrollment Requirements: A list of conditions necessary to receive a student loan. This may include a minimum number of hours taken and the mandatory number of days in attendance.
Fixed Interest Rate: Interest accrues at the same rate throughout the life of the loan. Once a borrower begins making principal and interest payments, the monthly payments will not change.
Lender Name: The name of the financial institution, bank, or credit union from which a borrower may obtain a private student loan.
Loan Consummation Disclosure Statement: A document provided by the lender that includes the terms and conditions of the loan, including the interest rate, fees, repayment schedule, and total loan amount. It explains the terms to the borrower before officially agreeing to take the loan and “consummate” the agreement.
Servicer Name: The name of the organization that collects payments, provides customer service, and performs other administrative responsibilities on a private student loan.
Variable Interest Rate: The interest rate is tied to current market rates and can fluctuate over the life of the loan. This will affect monthly payment amounts, which may be higher than in previous months.