Private education loans may have significant disadvantages when compared with federal education loans. We strongly encourage students to first borrow any federal loans for which they are eligible. The chart below will help in understanding the differences between federal and private education loan funds.
|Topic||Federal Direct Loans||Private Loans|
|Credit Check Required?||Direct Loan: No
PLUS/Grad PLUS: Yes (limited)
|Credit Score or Debt-to-Income considered?||Direct Loan: No
PLUS/Grad PLUS: No
|Co-Signer Required?||Direct Loan: No
PLUS/Grad PLUS: Usually No
|Deferment Options||Several Options||Depends on lender|
|Grace Period||Direct Loans: 6 months||Depends on lender|
Undergraduate Subsidized and Unsubsidized Direct Loans:
|Loan Fees*||Subsidized and Unsubsidized Direct Loans:
• Disbursed on or after October 1, 2019 and before October 1, 2020 is 1.059%
• Disbursed on or after October 1, 2020 and before October 1, 2021 is 1.057%
Direct PLUS Loans (Parent and Graduate/Professional):
• Disbursed on or after October 1, 2019 and before October 1, 2020 is 4.236%
• Disbursed on or after October 1, 2020 and before October 1, 2021 is 4.228%
|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|
* Rates Adjust Annually
When choosing a private education loan, students should compare the loan terms offered by several lenders in order to choose the best fit for their situation. When choosing a lender, borrowers should make sure that Walden University is a participating school in their loan program (www.elmselect.com).
Several points that should be researched when considering a private education loan:
Most private education loan programs require the Office of Financial Aid to certify a student’s eligibility before approving the loan. If students receive financial aid, they must notify the Office of Financial Aid of any private education loans they borrow, as it may affect aid eligibility.
Under the Federal Truth in Lending Act (TILA), the lender must provide students with the following documents:
Do you have questions about financial aid? If you haven’t yet applied to Walden, please contact an enrollment specialist at 855-646-5286 in the United States. If you are a current student, please contact a financial aid advisor at [email protected] or call 1-800-WALDENU (1-800-925-3368).