Student Lending FAQ

Federal Loans

How do I apply for financial aid? +

You’ll need to complete the FAFSA® form found on the Federal Student Aid website, which is required to receive financial aid. In addition, there is a second form called CSS profile, required by approximately 250 colleges. To find out if you need to fill out the CSS profile, visit College Board.

When should I apply for financial aid? +

Both forms will be available on October 1 of the student's senior year in high school. Each college may have different deadlines, so be sure to check with each you're applying to, to ensure forms are filled out in time.

How will I know if I qualify for financial assistance after I fill out the forms? +

Every college you listed on your FAFSA form will send you a financial aid award letter in the springtime. This award letter will contain information on any aid you qualify for from the federal government, state government and the college.

Financial aid consists of the following:

  • Scholarships and grants which do not have to be repaid.
  • Federal financial aid loans which do have to be repaid.
  • Available work study jobs on the college campus for students to earn money.
The most important thing is to understand and compare the aid offers from each school. Start with the total cost of each school, including tuition, room and board, fees, meal plans, and books – then subtract the total amount of aid that is being offered by that school. This will leave you with your out-of-pocket costs for each school. You can then look at this out-of-pocket cost for each school and compare them to see what the better offer is. Use this information as one of many factors when considering which school you would like to attend.  
Yes, everyone should apply for financial aid regardless of their income. All students will qualify for low interest rate loans and scholarships may require your results from the aid application as part of the scholarship application.

Private Student Loans

Who is the applicant on a private student loan? +

The most common situation is that the student is the primary borrower, and a parent is a co-borrower. You can also find private student loans that are just in the parent’s name.

Does the student have to have a co-signer? +

If the student can meet the income and credit guidelines on their own, they do not need a co-signer. However, most students do not meet the income and credit guidelines and usually need a co-borrower. In addition, having a co-borrower can help the student qualify for a lower interest rate.

What is the eligibility criteria to be approved for a private student loan? +

Every lender will have their own specific eligibility criteria but in general the qualifications are based on income and creditworthiness. The student usually has to be attending a lender-approved institution in a degree-granting program on at least a half-time or above status.
Some lenders do offer this option with stipulations that a certain number of on-time payments are made first and the student can qualify based on income and credit.
Lenders will have a range of interest rates posted on their website so you can see the lowest and highest interest rates offered at that time. Where you will fall within that range depends on the strength of your creditworthiness and repayment choices.
This depends on the lender; some may make you complete the application before they give you a rate. Other lenders will pre-qualify you in a few minutes with a soft credit check and can provide an estimated rate before you complete the loan process, giving you the ability to shop around for the best rate.
Usually lenders will give you a choice on when repayment begins. You can choose immediate payment, meaning monthly payments will begin one to two months after the loan has been disbursed. You can also select interest-only payments while the student is in school. Payments can also be deferred six months after graduation but interest is accruing during this time so this can be the costliest option.
All student loan lenders will send the money directly to the school. They will work with the school to set the payment dates, which are divided up by semesters.
Yes, the loan money can be used to cover any education-related expenses. The money will still be sent to the school, and they will apply it to the student’s account and refund the money to the student to cover those expenses.
You should apply for a loan no later than 30 days before the school requires payment. Some lenders will let you apply up to 120 days in advance.
The school will send a bill during the summer and this will give you the exact amount due. You can also use your financial aid award letter to get an estimate of how much you will need to borrow.
You can get a rate estimate and pre-qualify in about 15 minutes online.
Yes, extra payments can be made. While most will not charge you a pre-payment penalty, it is best to ask each lender directly. 
Most lenders no longer charge origination fees, but it is always a good idea to ask this question of any lender you are considering.

Student Loan Consolidation and Refinancing

What is the difference between student loan consolidation and refinancing? +

They are usually done together, but if you only have a single loan, you are only eligible for refinancing.

What loan terms are available with student loan refinancing? +

You can choose both variable or fixed interest rate options and loan terms of 5, 7, 10, 15 or 20 years.

Do I need a co-borrower to refinance my loans? +

If you have strong income and credit, you are not required to have a co-borrower.
No, you can refinance your loans multiple times as long the interest rates are in your favor, and it makes sense for your financial situation.

Most lenders do not charge you any closing costs or application fees.

Eligibility is based on income and credit. If the student does not meet this criteria, they can add a co-borrower. Students must be graduates and employed. If a student did not graduate, they could be eligible for the refinance loan after making payments for one year.
Yes, you can do this but should think about it very carefully before you do. Federal loans have repayment benefits such as public service forgiveness options, income-based repayment plans and other options that you will lose if you refinance them into a private student loan.
You can get pre-approved online in a few minutes, but the entire process can take as long as 30 to 60 days.
No, during the closing process you will be asked to provide payoff letters for each loan and the new lender will pay off the loans for you.

Federal Loan Repayment

How will I know when my next payment is due and how much it will be? +

Loan repayment began Oct. 1. The company that manages your student loan will be contacting you to let you know the exact date your next loan payment will be due and the amount you need to pay as well.

What if I have not been contacted by the company servicing my loan? +

A letter outlining your repayment will be sent to you 30 days before your repayment begins. You should make sure the company holding your student loan has your current contact information including email, phone, and mailing address.

What is the new SAVE repayment plan I have read about? +

This is a new type of income-based repayment plan which has the most favorable terms of all the income-based repayment plans. It is designed to make sure your monthly payments are affordable for your current income level. Visit to learn more about the SAVE plan and see if you qualify.
First of all, be proactive about your next due date and do your best not to miss the payment; if you do fall behind, a temporary ban on reporting late payments to the credit agencies is in effect for one year to help with the transition into repayment.
Once you know when and how much you will be paying every month, you need to set aside this amount of money in your monthly budget. Signing up for an auto payment option — where the money comes out of your account every month at the same time —­ is a good way to ensure you stay on track and build a positive credit history.
Options include: income-based repayment plans that ensure your monthly payment is affordable based on your income level; graduated repayment plans, which start your payments low in the beginning but gradually increase your monthly payment over the life of the loan; extended repayment option, which increase the number of years you must repay your loan, resulting in a lower monthly payment. Only use these repayment plans if necessary, as they can increase the total of the loan and cost you more in the long run. Many of these payment options have been modified to be even more beneficial and lower your payments even further.
Federal student loans come with benefits and assistance with repaying your loans, but most people will have on average eight separate loans and often want to consolidate them to make it easier to manage and track. You can use the federal direct consolidation loan to do this and still retain your federal loan benefits. You can apply at under the loan repayment section. If you also have a private student loan, you can do the same thing with a private student loan consolidation application. You can learn more and view current rates at While it is possible to combine both federal and private student loans into a private consolidation loan, you should think very carefully about it before you do. If you do consolidate federal student loans into private student loans, you will lose federal student loan repayment benefits such as forgiveness and income-based repayment plans. If you are financially secure and can lower your interest rates with a private student loan consolidation, it could make sense. Otherwise, it is recommended to keep your federal loans as is and retain your benefits.
If you do not already have one, you should create an online account with them so you can be proactive and view your repayment information as soon as it is available.
If you do not know who is currently holding your student loan or if it has been transferred and you have lost track of it, you can look up who is managing your federal student loan at . You will need to log in to this site with the same username and password used to access your FAFSA form, but don’t worry if you do not remember it — you can easily reset it. Once you log in you should go to your dashboard; this will be a summary screen of your loan balances. Click on “view details” in your loan summary. Next to each loan, you will see the name of your loan servicer. You can then click on each one and it will give you contact information such as phone numbers, website, and address.
If you follow these tips, you should be ready to start repaying your student loans. If you still have questions or need advice you can visit the repayment section at or call the company that manages your student loan directly (they are likely to have long phone wait times though, so you might want to try the online chat instead). If you are unsuccessful, you can reach out to a AAA Student Lending Specialist who can assist you with tips and suggestions on how to find and manage your student loan debt. We can be reached directly at 888-422-2536. You can even schedule a phone consultation online at
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