Private educational loans are available from private lenders and offer additional financial assistance to you if you have exhausted all other sources of funding for your education. These programs are meant to supplement federal and state aid when the Cost of Attendance (COA) is not fully covered by these programs. Most students can meet their educational costs by a combination of awarded financial aid and family resources. It is only when all resources do not meet educational costs that a student should consider a private loan. A student should exhaust all of their Federal Direct Stafford loan eligibility before considering private loans, since interest rates and fees are usually lower for federal loans.
There are circumstances, however, when the processing of private loans is reasonable. This may include students enrolled in a high cost program such as Study Abroad, Aviation Flight, or Physician Assistant, as well as out-of-state students and students who have exhausted their annual limits for the Federal loan programs. Students may also have additional educational expenses approved under Professional Judgment that may not be met with the Federal Direct/Federal Perkins loans. In some cases the parent may prefer that the loan be in the name of the student, rather than utilizing a PLUS loan.
Applying for Private Loans
Click here for our Preferred Lenders List. Valuable information about the private loan process and interest rate calculations is provided and should be read carefully. The Financial Aid Office will process the private loan requested by the student, however FAO will not certify private loans for an amount that exceeds the cost of attendance minus other financial aid or that require funding or financial guarantees by the University.
New Truth In Lending Act (TILA) regulations include additional processing steps and require a three day waiting period after the disclosures have been completed before the loan can be disbursed. Depending on the lender, this can add an additional 3 to 7 days from the time of application to disbursement.
After the loan has been certified, the lender will send the private loan funds to SIU by an Electronic Fund Transfer. The Financial Aid Office will make a final assessment of the students' eligibility. If the student remains eligible, the loan funds will be transferred to the SIU Bursar's Office. Private loan funds will be credited to the student's SIU account. If there is a credit balance after the loan is credited to the account, a refund check will be processed no earlier than the week before the start of the semester.