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Private financial aid programs
Overview
In addition to federal assistance, private student loans can often be obtained by students to pay for costs above and beyond what the government is willing to fund. This is especially true for students at undergraduate private institutions, graduate schools, and students attending schools for which federal financial aid is not available, such as K-12 preparatory schools.
Most of the private financial aid programs in the United States are underwritten by TERI, a non-profit education resources company.
Assistance
Private loan programs can provide anywhere from $1,500 to $45,000, depending on the credit history and record of the applicant and any eligible co-signer. Most loan programs have an aggregate limit as well, capping the total amount a student can have borrowed in their lifetime.
Rates and interest
Most private loan programs are tied to one or more financial indexes, such as the Wall Street Journal Prime rate or the BBA LIBOR rate, plus an overhead charge. Because private loans are based on the credit history of the applicant, the overhead charge will vary. Students and families with excellent credit will generally receive lower rates and smaller loan origination fees than those with less than perfect credit.
Eligibility
Private student loan programs generally issue loans based on the credit history of the applicant and any applicable co-signer/co-endorser. This is in contrast to federal loan programs which deal primarily with need-based criteria, as defined by the EFC and the FAFSA. For many students, this is a great advantage to private loan programs, as their families may have too much income or too many assets to qualify for federal aid, but insufficient assets/income to pay for schooling without assistance.
Additionally, many international students studying in the United States can obtain private loans (they are ineligible for federal loans in many cases) with a co-signer that is a United States citizen/permanent resident
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