Information on Private Student Loans Alternative Loans

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					                                                 Private Loans

Loan Sources

Those students who find either themselves ineligible for federal student aid, or have not received enough
federal aid to attend the school of their choice, may wish to seek additional private-sector loans—known
collectively as “Private or Alternative loans.” Private loans may be used to finance K-12 tuition,
undergraduate, graduate, continuing education, professional, or technical schooling. In financing your
college education, many funding sources are available. Private student loans fill the gap that remains after
scholarships, grants, and federal loans are exhausted.

The terms and conditions of Private loans, as well as the amounts one may borrow, are varied among
lending institutions. Since Private Loans are not federally administered, but rather, a private agreement
made between the borrower and lender, applying for financial aid (via the Free Application for Federal
Student Aid – FAFSA) is not required.

Under the AAA Student Lending Program, Private loans are offered to AAA members for undergraduate,
graduate, continuing education and K-12 schooling. The lender for the AAA Private Loan is RBS Citizens,
N.A., Member FDIC, Equal Opportunity Lender.

General Eligibility Requirements

To be eligible for a AAA Private Student Loan:

        Unless you are retired, you must have a satisfactory employment history for at least the last two
        years (if you are self-employed, you must have been in business for at least the last two years),
        You must have proof of current positive income (if you are self-employed, your business must also
        have a net positive income for the last 2 years),
        You must have at least 21 months of credit experience and a satisfactory credit history,
        You must have resided at your most current and immediately preceding addresses for a total of at
        least one year,
        And
        You must be a U.S. citizen or permanent resident and have resided in the U.S. for the previous two
        years.

International applicants or individuals with poor credit or no credit history may still qualify if they apply with
a qualified creditworthy U.S citizen or permanent resident co-signer.

Borrowing Limits

The annual borrowing limit for the AAA Private Loan for undergraduates and for graduates is up to the lesser
of the cost of attendance or $30,000 ($40,000 for certain schools where it has been determined that the
annual cost of attendance exceeds $30,000). The cost of attendance may include not only tuition and school
fees, but also room and board, books, a computer, and many other education-related expenses that may
arise. K-12 and continuing education borrowers may borrow annually up to $30,000. The total aggregate
borrowing limit is $130,000.

Dependent vs. Independent Status

Though many forms of student aid are based upon financial need, Private loans are available to all those
who qualify. The amount you may borrow is generally not affected by the borrower’s status as a dependent
(though a creditworthy co-signer may be required).

Interest and Other Charges

The variable interest rate on the AAA Private Loan ranges, depending on the credit-worthiness of the
borrower and co-signer, if any, for undergraduates, from LIBOR Index1 + a margin of 3.50% to LIBOR Index
+ a margin of 7.75% (APRs range from 9.10% to 14.59%2); for graduates, from LIBOR Index + a margin of
3.50% to LIBOR Index + a margin of 7.75% (APRs range from 9.23% to 14.37%3); and for continuing
education loans, from LIBOR Index + a margin of 3.75% to LIBOR Index + a margin of 8.00% (APRs range
from 9.52% to 14.73%4). The interest rate for K-12 loans is LIBOR Index + a margin of 4.95% (11.11%
APR5).


                See accompanying footnotes on page 2 for important information
Loan origination fees for the AAA Private Loan range according to the creditworthiness of the borrower and
co-signer, if any, (and in the case of undergraduate loans, also based on the repayment option selected),
from 3.00% to 10.50%. The origination fee for the K-12 school loan is 6.00%. If loan payments are not
made according to the terms of the agreement, late fees and/or collection costs may be assessed.

Borrower Benefits
                                                                Repayment
The AAA Private Loan offers the borrower
convenient terms and borrower benefits.                         Several repayment options are available for AAA Private Loans depending
A co-signer release option is available to                      upon the loan product as follows:
borrowers who elect to make automatic
payments via ACH, and make the first 48                               •     Undergraduate loans allow for one of three repayment options: (i)
consecutive payments of principal and                                       Immediate payment of principal and interest (30-60 days after
interest on-time6.     Take advantage of                                    disbursement); (ii) Immediate payment of interest with principal
                                                                            deferred while enrolled in school at least half time; or (iii) The
interest rate reduction of 0.25% for
                                                                            deferment of both interest and principal, with the interest
borrowers      who      make     automatic                                  capitalized. while enrolled in school at least half time
payments via ACH7, and an additional                                  •     Graduate education loans begin repayment of principal and
0.25% rate reduction to borrowers who                                       interest six months after (i) graduation or (ii) you cease to be
elect to make payments via ACH and                                          enrolled at least half time. Principal at repayment is the principal
make the first 36 consecutive payments                                      amount of the loan at disbursement plus interest that accrues and is
of principal and interest on-time8.                                         capitalized during the deferment term.
                                                                      •     Continuing education loans repayment term is deferred until the
                                                                            earlier of: (i) 6 months after the student graduates or earns a
                                                                            certificate; (ii) 6 months after the student ceases to be enrolled; or
                                                                            (iii) 2 years after the loan disbursement.
                                                                      •     K-12 Tuition loans require the immediate (30-60 days after
                                                                            disbursement) repayment of principal and interest.



1
 The LIBOR Index is equal to the one-month LIBOR published in the “Money Rates” section of the Wall Street Journal on the first business day
of the preceding calendar month. LIBOR means the London Interbank Offered Rate.
2
 Annual Percentage Rate (APR) computations assume student borrows $10,000 and all payments, including interest, are fully deferred for 48
months. LIBOR Index in effect as of 01/01/08 is 5.24%. The interest rate and APR will increase during the life of the loan if the LIBOR Index
increases. RBS Citizens, N.A., Member FDIC and Equal Opportunity Lender, is the lender for the AAA Southern New England Undergraduate
Loan. The loan terms described in this brochure are for the 2007-2008 academic year and are subject to change.
3
 Annual Percentage Rate (APR) computations assume student borrows $10,000 and all payments are fully deferred for 24 months. LIBOR
Index in effect as of 01/01/08 is 5.24%. The interest rate and APR will increase during the life of the loan if the LIBOR Index increases. RBS
Citizens, N.A., Member FDIC and Equal Opportunity Lender, is the lender for the AAA Southern New England Graduate Loan. The loan terms
described in this brochure are for the 2007-2008 academic year and are subject to change.
4
 Annual Percentage Rate (APR) computations assume student borrows $5,000 and all payments are fully deferred for 18 months. LIBOR
Index in effect as of 01/01/08 is 5.24%. The interest rate and APR will increase during the life of the loan if the LIBOR Index increases. RBS
Citizens, N.A., Member FDIC and Equal Opportunity Lender, is the lender for the AAA Southern New England Continuing Education Loan. The
loan terms described in this brochure are for the 2007-2008 academic year and are subject to change.
5
 Annual Percentage Rate (APR) computation assumes student borrows $10,000 and payments begin within 30 to 60 days of disbursement.
LIBOR Index in effect as of 01/01/08 is 5.24%. The interest rate and APR will increase during the life of the loan if the LIBOR Index
increases. RBS Citizens, N.A., Member FDIC and Equal Opportunity Lender, is the lender for AAA Southern New England K-12 Loan. The loan
terms described are for the 2007-2008 academic year and are subject to change.
6
 Co-signers will be eligible for co-signer release upon request if (a) the first 48 payments of principal and interest are paid on time, (b) at any
time prior to the 48th on-time payment, the borrower who receives the monthly bill elects to have monthly principal and interest payments
transferred electronically from a savings or checking account and continues to make such automatic payments through the 48th payment, and
(c) the borrower meets creditworthiness criteria at the time of the release of the co-signer. The co-signer release is only available for
undergraduate, graduate, and continuing education loans.
7
 The 0.25% rate reduction is available to borrowers who elect to have monthly principal and interest payments transferred electronically from
a savings or checking account. The interest rate reduction will begin when automatic principal and interest payments start, and will remain in
effect as long as automatic payments continue without interruption. The reduced interest rate will return to contract rate if automatic
payments are cancelled, rejected or returned for any reason.
8
 Upon request, borrowers are also entitled to an additional 0.25% interest rate reduction if (a) the first 36 payments of principal and interest
are paid on time, and (b) at any time prior to the 36th on time payment, the borrower who receives the monthly bill elects to have monthly
principal and interest payments transferred electronically from a savings or checking account and continues to make such automatic
payments through the 36th payment. The reduced interest rate will not be returned to contract rate if, after receiving the benefit, the
borrower discontinues automatic electronic payment.

				
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