Private Education Loans

Private Education Loans

Comparing Private Loans and Federal Loans

Private education loans may have significant disadvantages when compared with federal education loans. We strongly encourage you to first borrow any federal loans for which you are eligible. The chart below will help you in understanding the differences between Federal and Private Loan funds.

Comparison Chart of Federal and Private Education Loans
PLUS/GradPLUS: Yes (limited)
PLUS/GradPLUS: No
PLUS/GradPLUS: Usually no
PLUS: up to 4%
Choosing a Private Loan

Federal Loans Private Loans
Credit Check Required? Federal Direct Loans: No Yes
Credit Score or Debt-to-Income considered? Federal Direct Loans: No Yes
Co-Signer Required? Federal Direct Loans: No Usually yes
Deferment Options Several options Depends on lender
Grace Period Federal Direct Loans: 6 months Depends on lender
Interest Rate Fixed Usually variable
Loan Fees Federal Direct Loans: up to 1% Depends on lender
Flexible Repayment options Many options available Generally none
Loan Forgiveness Options Several options available Generally none
Penalties for Early Repayment None Depends on lender


Private education loans may have significant disadvantages when compared with federal education loans. We strongly encourage you to first borrow any federal loans between Federal and Private Loan funds. You should compare the loan terms in order to choose the best fit for your situation. When choosing a lender, make sure that Santa Fe University is a participating school in their loan program (www.elmselect.com).


The chart above will help you in understanding the differencesAfter you have completed your application (usually three to four weeks), the loan request will:

  • be sent electronically from the lender to our loan data provider, ELM, and
  • we will receive the loan request and certify your loan eligibility on ELM
  • ELM will send notification to your lender that the loan request has been
  • the lender will schedule the electronic funds transfer (EFT) directly to SFUAD
  • Please monitor and respond quickly to any school or lender requests

Here are several points you should research when considering a private loan:
Most private loan programs require our office to certify your eligibility before approving your loan. If you receive financial aid, you must notify our office of any private loans you borrow as it may affect your aid eligibility.

  • What is the interest rate; is it fixed or variable; is the rate capped?
  • What fees must be paid for this loan and when are they due?
  • How will I receive my loan funds?
  • When does repayment begin and is there a grace period?
  • What will my monthly payment be?
  • What will be the total cost if I use the full repayment period?
  • Are there penalties for early repayment?
  • Are there deferment, forbearance or cancellation options?

Truth in Lending Act

Under the Federal Truth in Lending Act (TILA), your lender must provide you with the following documents:
You must complete this form and return it to the lender before receiving your first disbursement of loan funds.

  • Self-Certification Form You must complete this form and return it to the lender before receiving your first disbursement of loan funds. After you signed your promissory note, the Final Disclosure Statement confirms the terms and conditions of your loan. At the time that this final disclosure is delivered, your “right-to-cancel” period begins. During this period of three to six days, you may cancel the loan by contacting the lender. The lender cannot release the first disbursement of your loan funds until the end of the right-to-cancel period. If you have questions, contact the Financial Aid Office at sfs@santafeuniversity.edu or call toll free (877) 397-7502.