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Information about Private Student Loan (united States)

Student loans in the U.S.
Regulatory framework
Higher Education Act of 1965
US Dept of Education
FAFSA Cost of attendance
Distribution channels
Federal Direct Student Loan Program
FFELP
Loan products
Perkins · Stafford
PLUS · Consolidation Loans
Private student loan
A private student loan is a financing option for higher education in the United States that can either supplement or replace federally guaranteed loans such as Stafford loans, Perkins loans and PLUS loans. These are unsecured loans with various options for repayment and may offer forbearance and deferral options.

Interest rates are set by the financial institution that underwrites the loan, typically based on the perceived risk that the borrower may be delinquent or in default of payments of the loan. The underwriting decision is complicated by the fact that students often do not have a credit history that would otherwise indicate creditworthiness. As a result, interest rates may vary considerably across lenders.

Because private student loans are subject to special treatment in the event of a personal bankruptcy, students may not incur a total debt in excess of the cost of attendance, taking into account scholarships, fellowships, federal loans and private loans.

A number of financial institutions offer private student loans, including large banks (e.g., Citibank, Bank of America, and Wachovia) and specialized companies (e.g., Sallie Mae, MyRichUncle, Astrive Student Loans, Act Education Loans). Financial aid offices in universities typically have a preferred vendor list, but borrowers are free to obtain loans wherever they can find the most favorable terms.

Buying factors include:
  • Interest rates throughout the life of the loan - lenders may accrue interest at one rate while the student is in school and another after graduation
  • Payment options - lenders typically offer loans that are payable immediately, interest-only loans while the student is enrolled, and no-payment loans until graduation
  • Incentives - lenders may offer improved or tougher terms based on the student's payment record
  • Origination fees - lenders typically charge a fee for originating the loan that is added to the principal of the loan.
The total cost of the loan is usually document in the Truth in Lending statement that is issued when the loan is originated.

References

Student loans are loans offered to students to assist in payment of the costs of professional education. These loans usually carry a lower interest rate than other loans and are usually issued by the government.
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The Higher Education Act of 1965 (Pub. L. No. 89-329) was legislation signed into United States law on November 8, 1965 as part of President Lyndon Johnson's Great Society domestic agenda.
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United States
Department of Education

Seal of the Department of Education
Agency overview
Formed October 17, 1979

Employees 5,000 (2007)
Annual Budget Discretionary: $56.0 billion (2006)
Mandatory: $13.
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The Free Application for Federal Student Aid (known as FAFSA), is a form that can be filled out annually by current and anticipating university students (both undergraduate and graduate) and sometimes their parents in the United States to determine their eligibility for
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In education finance in the United States, the cost of attendance is the estimated full and reasonable cost of completing a full year as a full-time student. The cost of attendance is published by each educational institution and typically includes:

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The William D. Ford Federal Direct Loan Program (FDSLP), often referred to as "Direct Loans," is a United States Department of Education program that provides loans to help students pay for education after high school.
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The Federal Family Education Loan Program (FFELP) is a United States Department of Education program that provides for private organizations to market, originate, and service federally guaranteed loans, such as Stafford and PLUS loans to students and their parents.
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A Federal Perkins Loan, or Perkins Loan, is a need-based student loan offered by the U.S. Department of Education to assist American college students in funding their post-secondary education. The program is named after Carl D. Perkins, a former member of the U.S.
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A Stafford Loan is a student loan offered to eligible students enrolled in American institutions of higher education to help finance their education. The terms of the loans are described in Title IV of the Higher Education Act of 1965 (with subsequent amendments), which guarantees
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A PLUS Loan is a student loan offered to parents of students enrolled at least half time in eligible programs at participating and eligible post-secondary institutions. As of July 1, 2006 PLUS Loans are also available to graduate and professional students at participating and
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Top consolidation lenders ranked by total FY 2006 consolidation loan originations
Lender name # of loans Amt of loans ($)
Federal Direct Student Loan Program $19,197,268,873
Sallie Mae $19,841,423,841
Citibank $4,843,119,089
Nelnet $4,796,065,812
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Higher education is education provided by universities, vocational universities (community colleges, liberal arts colleges, and technical colleges, etc.) and other collegial institutions that award academic degrees, such as career colleges.
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A Stafford Loan is a student loan offered to eligible students enrolled in American institutions of higher education to help finance their education. The terms of the loans are described in Title IV of the Higher Education Act of 1965 (with subsequent amendments), which guarantees
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A Federal Perkins Loan, or Perkins Loan, is a need-based student loan offered by the U.S. Department of Education to assist American college students in funding their post-secondary education. The program is named after Carl D. Perkins, a former member of the U.S.
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A PLUS Loan is a student loan offered to parents of students enrolled at least half time in eligible programs at participating and eligible post-secondary institutions. As of July 1, 2006 PLUS Loans are also available to graduate and professional students at participating and
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A loan is a type of debt. All material things can be lent but this article focuses exclusively on monetary loans. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the and the .
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In financial economics, a financial institution acts as an agent that provides financial services for its clients. Financial institutions generally fall under financial regulation from a government authority.
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Credit risk is the risk of loss due to a debtor's non-payment of a loan or other line of credit (either the principal or interest (coupon) or both).

Faced by lenders to consumers

Main article: Consumer credit risk

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A counterparty is a legal and financial term. It means a party to a contract. A counterparty is sometimes referred to as a "contraparty."

Example: If you have signed a contract with BigCompany that states that you will buy something from them, you and BigCompany are
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In finance, default occurs when a debtor has not met its legal obligations according to the debt contract, e.g. it has not made a scheduled payment, or has violated a loan covenant (condition) of the debt contract.
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Underwriting refers to the process that a large financial service provider (bank, insurer, investment house) uses to assess the process of providing access to their product like providing equity capital, insurance or credit to a customer.
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In the United States, a credit score is a number that is based on a statistical analysis of a person's credit report, and is used to represent the creditworthiness of that person—the likelihood that the person will pay his or her debts.
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This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.
You can assist by [ editing it] now. A how-to guide is available, as is general .
This article has been tagged since February 2007.
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Personal bankruptcy is a procedure which, in certain jurisdictions, allows an individual to declare bankruptcy. In other jurisdictions, bankruptcies are reserved for corporations.
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In education finance in the United States, the cost of attendance is the estimated full and reasonable cost of completing a full year as a full-time student. The cost of attendance is published by each educational institution and typically includes:

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Citibank

Subsidiary (of Citigroup)
Founded 1812
Headquarters New York, New York

Key people Chuck Prince, CEO & Director
Industry Finance
Products Financial Services
Slogan Let's get it done.
Website www.citibank.
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Bank of America Corporation

Public (NYSE:  BAC TYO: 8648 )
Founded (as "Bank of Italy") San Francisco, CA (1928)

(acquiring banks)

Charlotte, NC (1874)

Boston, MA (1784)

Headquarters Charlotte, North Carolina, U.S.
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Wachovia Corporation

Public (NYSE:  WB )
Founded 1908[1]
Headquarters Charlotte, North Carolina

Key people G. Kennedy Thompson, Chairman & CEO
Thomas J.
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SLM Corporation

Public (NYSE:  SLM )
Founded 1972
Headquarters Reston, VA, USA

Key people Al Lord, Chairman
C.E. Andrews, CEO
Industry Education finance
Products Government guaranteed student loans
Private student loans
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MyRichUncle

Public (NASDAQ:  UNCL )
Founded 2001
Headquarters New York City, USA

Key people Edwin McGuinn, Chairman & CEO
Raza Khan, President
Vishal Garg, CFO
Industry Education finance
Employees 70
Website MyRichUncle.
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