Private Loans for Undergraduate Students

Private loans are often used by undergraduate students to meet educational costs after more favorable grants, scholarships and federal loans are exhausted. Current economic conditions have caused major changes in private student loan offerings for undergraduate students. These changes have negatively impacted both the access and the affordability of private student loans. Therefore, Graduate Leverage is currently not offering a private student loan program for undergraduate students. Of particular note:

• Average interest rates on variable rate private student loans have risen to over 11%*
• Private loan eligibility requirements have become extremely demanding
• Some lenders require payments during the student's in-school period

Many families use private student loans because they allow the student to be the primary borrower. While this may be an attractive feature, families need to be aware of the high cost and unfavorable terms that may come with choosing a private loan. However, there are other options.

For undergraduate students and families searching for a low-cost loan option where the parent is the primary borrower of the loan, there is the Federal Parent PLUS Loan.

The Student Plus Program™** is the ideal option for families who want the student to make payments following graduation, but also want the lower fixed interest rate provided by the Federal Parent PLUS Loan.

Program Comparison Chart
	Private Loans	Federal Parent PLUS	Student Plus Program **
Interest Rates	Current rates average 11% * Variable rate based on Prime or LIBOR, which are historic lows Rates likely to increase as Prime and LIBOR normalize	7.9% or 8.5% Fixed rate	7.9% or 8.5% Fixed rate
Fees	Up to 11% of loan amount	2.5% to 4% of loan amount	2.5% to 4% of loan amount $100 - $250 set-up fee and may be deferred for an additional charge $4.75 standard processing fee Additional fees may apply.
Eligibility Criteria	Minimum credit scores as high as 720 Debt to income ratio and income verification reviewed Cosigner often required	Absence of negative credit history	Absence of negative credit history
Repayment	Principal and interest payments may be required immediately upon disbursement	May be deferred while student is in-school	May be deferred while student is in-school
Payments Made By	Student (parent/cosigner responsible if student defaults)	Parent	Student (parent responsible if student defaults)