Education Loans: Act Education Loan Program
Act Education Loans are private student loans that can be used to cover the difference between school expenses and Federal financial aid such as the Stafford Loan. This translates into fewer out-of-pocket expenses until after graduation.
Because of their versatility, private education loans can be used for any school related expense - including books, tuition, supplies, lab fees, transportation and housing expenses.
How Are Private Education Loans Different?
Unlike federal loans, private student loans do not require the FAFSA. However, a credit check for the primary borrower and/or a co-signer is needed to qualify. The interest rate is variable, and based on either the LIBOR or Prime indexes, plus a margin for credit.
Act Education Loan Benefits
- Defer payments while in school and for a six-month grace period after graduation
- Lower your interest rate by 0.25% when you choose to have your payments automatically deducted from your personal bank account
- Annual Maximum is 100% of your Cost of Attendance minus other aid, based on school certification
Act Education Loan Eligibility
- Must be enrolled at least half-time in an eligible 4 or 5 year undergraduate degree program.
- You must be a U.S. citizen or permanent resident
- A cosigner may be required
- You and your cosigner must both pass a credit check
Consider a Cosigner
If you are concerned about being approved for a private education loan, or you do not have 27 months of credit history, you might want to consider strengthening your chances by adding a cosigner.
Frequently Asked Questions About Education Loans in General
What is a private education loan?
Unlike Federal Student Loans, private education loans are specialized education loans based on your credit history and income and should only be considered after all federal loans, grants and scholarships have been exhausted. Lenders typically give better terms for better credit history.
What can private education loans be used for?
Private education loans can be used for education-related expenses including such things as tuition, books, transportation and room and board.
Who can apply for a private education loan?
The student must apply for the loan. Since many students do not have extensive credit history, they will need a creditworthy cosigner to apply for this loan.
Are there application deadlines?
No. You may apply for a private education loan at any time.
What is the application process?
You will need to submit your application online. Once you determine the amount you want to borrow, you will need your Social Security Number, driver's license, cosigner information, and two additional references ready. You and your cosigner's credit will be checked. You can then check your status online at any time.
What are the interest rates?
Interest rates will be based on you and your cosigner's credit history and are generally stated as an index, such as Prime or LIBOR, plus a margin.
Is the interest tax deductible?
Interest on student loans may be tax deductible. Please consult your tax advisor or visit irs.gov for more information.
How soon will I receive my funds?
Once you receive conditional approval, you will complete a promissory note and be required to submit documentation to verify the information on your application. If you return the requested documents quickly, your school will receive the funds soon afterwards. You can check with your school for specific disbursement dates for each semester.
Who offers private education loans?
Banks, private lenders and other financial institutions offer private education loans.
How long are repayment terms for private education loans in general?
Repayment terms typically range from 15-20 years.
Are there any deferment options?
You can typically choose to begin repaying your loan immediately, make interest only payments while you are in school, or defer all of your payments while you are in school. Any interest you defer will be capitalized (added to your balance) when you begin making your loan payments.
What should I look for in a private education loan?
Interest rates and fees can vary significantly between lenders. Many lenders also offer borrower benefits that can reduce the principal or interest on a private education loan. Be sure to look carefully at the terms and conditions when applying for a loan.
* The legal age for entering into contracts is 18 years of age in every state except Alabama and Nebraska (19 years old), and Mississippi and Puerto Rico (21 years old).
ActEducationtLoans.com is a service of the Student Loan Network, one of the nation's fastest growing providers of student loans and related information. Since 1998, we have helped over 25 million students and parents access more than $1 billion in federal and private student loans, school scholarships and student loan consolidation funding for undergraduate, graduate and continuing education. Learn more about the Student Loan Network.