It is extremely important from a personal finance standpoint that you first exhaust ALL other financing options such as grants, scholarships, and federal Stafford loan eligibility prior to considering a federal Parent PLUS or private student loan. We advise you to only borrow what is truly needed to pay for qualified educational expenses. When borrowing to finance your education, you should give serious consideration to the loan amounts needed throughout your entire education. You will want to make sure you can comfortably afford your student loan indebtedness based on your expected income after graduating.
Students and/or families seeking additional financing to cover the costs associated with education consider federal Parent PLUS and private student loans. Which loan program is better is an individual decision and will be dependent on your, and/or your family’s individual circumstances and preferences. We highly recommend you research both options and choose the loan program that best meets your, and/or your family’s individual needs.
- Dependent undergraduate students and families have the option of using Parent PLUS and private student loans
- Independent undergraduate students have the option of using private student loans
Many students, particularly undergraduate students, will need to find willing, creditworthy individual(s) to co-sign their private student loan applications to increase the likelihood of being approved and getting the best pricing and terms extended to them.
For students and/or families that would like to consider both options prior to making a final decision, it is advised that you start the process early and apply (cross-shop) between federal Parent PLUS and private student loans within a 30 day window. Applying for a private student loan does not impact eligibility for a Parent PLUS and applying for multiple credit-based student loans (rate shopping) within a 30 day window will be treated as one inquiry when a lender determines a credit score.
Three categories are generally compared when considering loan options. They are eligibility, costs (interest rate and fees) and repayment. The weight you and/or your family place on each of these categories when making a decision will be based on your individual preferences. We have developed the questions and chart below to assist you with this process.
Regardless of what loan option and lender you choose to use, our office will do our best to process your loan as efficiently as possible.
While the Parent PLUS program terms are known, private student loan terms will vary based on lender. It is for this reason we recommend that you compare all options carefully.
When comparing the eligibility of student loans, students and/or families should ask:
- Who is the borrower on the loan?
- Will I need a cosigner?
- What is required of my cosigner?
- Am I eligible if I am not going to school at least half-time?
- Can I borrow for past due balances?
- Do I need to be pursuing a degree?
When comparing the cost of student loans, students and/or families should ask:
- What is the interest rate (fixed or variable rate)?
- Are there any loan fees?
- Are there any loan discounts? (Up front? Back end?)
- What will the monthly payment be upon graduation?
- What is the repayment term?
When considering repayment, students and/or families should ask:
- Is there a grace period after graduation?
- How long is the repayment term?
- Who will service my loans?
- What repayment options are available?
- Are there deferment or forbearance options?
- Is there loan forgiveness and under what circumstances?
Other Private Loan Options
Also referred to as private loans, these are a very viable source of funding to help families meet college costs — if the applicant is aware that these are interest-bearing loans that will need to be repaid. These loans, having many similarities between them, are offered by a bank or other lending institution and are credit-worthy loans. When investigating these loans, it is wise to compare the interest rates and repayment terms. For more information on available alternative loans, contact the Office of Student Financial Planning Office at 302.736.2494.
Civic/Social Groups and Other Organizations
Examples might include a family member’s fraternity or sorority, churches and other religious orders. These can prove an excellent source for scholarship and grant opportunities.
These often are two of the greatest resources for getting information on scholarships, grants and loans available from sources other than the Federal government and Wesley College. You should avoid services that charge a fee for providing information on scholarships and grants.
State Grants and Scholarships
Some states provide residents with grants and/or scholarships. Applicants usually apply for these when completing the appropriate year FAFSA by the state’s filing deadline. You should refer to an appropriate year FAFSA for specific state application deadlines. Applicants should also check with their state scholarship agency to see if grants and scholarship awards may be used at colleges outside of their state of residency.
Wesley College ROTC Program
Through a partnering with the University of Delaware ROTC unit, Wesley College students are able to participate in the benefits of the ROTC program. Please seek further information at the following link regarding this program. Wesley College ROTC Program or visit our website at http://www.udel.edu/armyrotc