Private Loans
Private education loans are designed to provide you with additional assistance for educational costs. Private lenders are available to offer these types of services. When considering private student loans, it is extremely important from a personal finance standpoint that you have first exhausted all other financing options such as grants, scholarships, and all types of federal student loan options.
The following table shows that a federal student loan is a better option than a private student loan.
Federal Student Loans vs. Private Loans
For more information on federal vs private loans go to studentaid.ed.gov.
Effective February 14, 2010, the Federal Reserve Board approved final rules on Regulation Z* (Truth in Lending Act) that revises the disclosure requirements for private education loans. Private education loans will not include some institutional loans such as tuition payment plans, most short-term institutional loans, or the Emergency Payment option.
Under the new laws, a lender offering private loans for postsecondary educational expenses must first provide a disclosure about loan terms and features at the time of application and must disclose information about federal student loan programs that may offer less costly alternatives. If the initial application reaches an approval status, a second loan disclosure statementLenders are required to provide the borrower with a disclosure statement before issuing a loan. The disclosure statement provides the borrower with information about the actual cost of the loan, including the interest rate, origination, insurance, and loan fees, and any other kinds of finance charges. must be provided to the student at that time. If a student accepts the loan terms provided in the second disclosure statement, a third final disclosure must be provided when the loan is consummated.
A lender must also provide the student with a 3 day rescission or “Right-to-Cancel” period after the final loan disclosure form is sent to the student. The Right-to-Cancel period means that once UNT has certified your loan and all disclosures are sent, there is a mandatory 3 business day waiting period before the lender may disburse loan funds to the school. Note: If a lender only offers a mailed Final Disclosure (not online), then they must wait 6 days to disburse the loan to the school (3 days for mail time and an additional 3 day rescission or “right-to-cancel” period).
An additional piece of the new private loan regulations requires an applicant to complete a Self-Certification form and return it to the lender before they may disburse the loan to the school. The Self-Certification form may be found on the lender’s website. Cost of Attendance information from the University of North Texas may be needed for the Self-Certification.
* (PDF files require Adobe Acrobat Reader to be viewed. You can download Acrobat Reader from http://get.adobe.com/reader.)
Important Private Loan Information
All Alternative or private loan applications should be initiated by the borrowerThe person who receives a loan. via the respective lender's website.
The Process
- Apply online through the lender's website (you will receive the Application Disclosure Statement and complete the Self-Certification form). If your lender requests additional information, submit and send any additional information to your lender and not UNT.
- Once your credit is approved and your private loan promissory note has been received by your lender, your lender will then send UNT an electronic certification request. UNT will not be sent any information until both of these items are completed by your lender.
- If all requirements are met, UNT will award your private loan. You will be required to review the loan on myUNT and accept it if all is correct. Once accepted UNT will submit the completed loan certification to your lender for funding. Monitor myUNT for award information.
- Loans are certified with one disbursementDisbursement is the release of loan funds to the school for delivery to the borrower. The payment will be made co-payable to the student and the school. Loan funds are first credited to the student's account for payment of tuition and fees. Any excess funds are then paid to the student in cash or by check for the purpose of paying for other educational expenses. per term.
- Once your private loan certification has been completed, you will be notified by UNT to complete Private Loan Counseling. Effective Fall 2011, private loan borrowers at UNT are required to complete Private Loan Counseling annually. You may complete your Private Loan Counseling by following the steps here. You must complete the counseling before UNT can release any of your private loan funding.
- Once your lender receives UNT's loan certification, you will be provided an Approval Disclosure Statement by the lender.
- Once you accept the Disclosure terms with the lender, you will receive a Final Disclosure Statement (if not available online, the lender must wait 6 days to disburse the loan to the school).
- The lender will send the private loan funds to UNT once the Right-to-Cancel waiting period has ended (mandatory 3 days).
- Private loan funds will be released to your student account only if all loan eligibility requirements, including completion of your Private Loan Counseling, are met at the time of disbursement (10 days before the start of the semester). Once the funds are released to your student account the office of Student Accounting will initiate your refund process if applicable.
- For Summer, loan funds will be released in one disbursement on the 1st class day of the session in which you establish the enrollment required by your lender.
Important Tips
Below are important points for completing the application and faster processing time.
- Use UNT's loan periods (one application per loan period)
- Fall/spring term: August-May
- Fall-only term: August-December
- Spring term: January-May
- Summer term: May-August
- Use E-sign if available. If you need to print, sign and submit/mail any private loan documents, be sure to send it to your lender and not UNT.
- The Free Application for Federal Student Aid (FAFSA)The FAFSA is used to apply for Pell Grants and all other aid. Complete your FAFSA via web at www.fafsa.gov . As the name suggests, no fee is charged to file a FAFSA. Follow the directions carefully to ensure proper and efficient processing. will allow you to apply for lower interest rate William D. Ford Federal Direct Stafford Loan (Direct Loan) Program loans. Student Financial AidMoney provided to the student and the family to help them pay for the student's education. Major forms of financial aid include gift aid (grants and scholarships) and self help aid (loans and work). and Scholarships (SFAS) encourages you to complete and apply for Direct loans first. If you will not be completing a FAFSA and do not wish to apply for Direct loans, please notify our office.
- If currently awarded aid to Cost of Attendance through the FAFSA, contact the SFAS office at (940) 565-2302.
- Keep your personal contact information (address and phone numbers) updated with the Registrar, so SFAS can easily contact you if needed.
- SFAS encourages you to research several lenders before applying in order to find the best loan for your circumstances as rates, fees, and repayment arrangements vary.
- Effective Fall 2011, private loan borrowers at UNT are required to complete Private Loan Counseling annually. This requirement is a step in UNT's Default Aversion Plan; our goal is to ensure that each borrower understands how to manage their loan debt and the commitment that comes with the acceptance of a private student loan. Above all, borrowers must realize that private student loans require repayment, at the lender's discretion. You may complete your Private Loan Counseling by following the steps here. You must complete the counseling before UNT can release any of your private loan funding.
- UNT certified loans for the following Private Loan Lenders during the previous year:
- Citizens One
- Custom Choice by Sun Trust Bank
- Discover Student Loans
- PNC Bank
- Sallie Mae
- Texas Extra Credit
- Texas Higher Education Coordinating Board
- Union Federal
- Wells Fargo