Written By: Laura McPherson, NursingSchools411.com
There are a wide variety of options for financing your nursing degree. One option that is sometimes overlooked is private education loans. These loans are typically backed by private banks, as opposed to federal student loans which are guaranteed by the government. Let’s take a look at what students need to know about this type of financing and the steps to choosing a private education loan provider.
Private Education Loan Pros and Cons
As with any type of loan, there are advantages and disadvantages to choosing private education loans. Private education loans frequently have more stringent borrowing requirements. Your lender might also require you to provide certification of additional need from your school’s financial aid office. Additional considerations of the pros and cons of private loans include:
Pros:
- Interest rates for private education loans are typically less expensive than interest rates for credit card debt.
- You may qualify for a private education loan even if you do not qualify for a federal loan.
- Private education loans often allow you to borrow larger amounts than federal loans; this can be helpful for full-time students.
- Private education loans can have lower monthly payments than federal loans because the loan terms can be longer. This can mean easier repayment for recent graduates, but keep in mind that this also extends the accumulation of interest over the loan’s lifetime.
Cons:
- Private education loans may require you to have a co-signer with an excellent credit history, especially if you do not have a history of your own or collateral to secure the loan.
- Private education loans can be more expensive, especially those that offer variable interest rates as opposed to fixed interest rates.
- Private education loans have less flexibility for extending the term of the loan compared to federal student loans.
- Private education loans may have fewer options for debt forgiveness or hardship.
When Are Private Education Loans the Better Option?
Federal education loans are almost always less expensive than private education loans, but that does not mean that private education loans are unnecessary. To the contrary, there are several circumstances where private loans can help.
- If you are ineligible for federal student loans because you have already used the maximum amount or do not meet eligibility guidelines, you may be eligible for private loans.
- If your federal student loans do not meet the full cost of tuition and board for the semester, private loans can help fill the gap.
- If your salary after graduation allows you a comfortable budget for repaying loan obligations, a private loan can be affordable. NursingSchools411.com provides detailed information on salaries for registered nurses to help you plan.
Students are usually best served by exhausting federal aid, scholarship, and grant opportunities before seeking a private education loan. Even if you do use a private education loan, don’t neglect to apply to any scholarship or grant opportunities for which you are eligible during your education. As with federal loans, you are not required to use the maximum loan amount for which you are approved, and using less can save you a considerable amount over the lifetime of your loan.
Tips for Choosing a Private Education Loan
A good place to start looking for a private education loan is your school’s financial aid office. Many schools maintain lists of preferred lenders; if a lender on this list is used, it may make the disbursement process smoother. To make sure that you are getting the best deal with your loan:
- Also ask about private education loans from banks with which you or family (if you have family members as loan co-signers) already have a banking relationship. Often times this can lead to rate discounts or easier repayment terms.
- Compare offers from at least three banks to make sure you are getting the best value. Loan terms to compare include the amount of the loan offered (the principal), fees for servicing the loan, the interest rate, and the repayment periods and monthly amounts.
- Choose a lender with a strong reputation and a good track record for customer service; check ratings with independent agencies like the Better Business Bureau. You should also consider whether the lender has branches in your area in case you have an issue to resolve, and if easy payment options like online billing are offered.
An accelerated BSN program offers the same quality and depth of education as a traditional BSN program, but is completed in less time. The accelerated BSN program at Marian is completed in 16 months - that’s less time than it typically takes to complete a traditional associate’s degree! This means that not only can you start your nursing career sooner, but you may be able to complete the program with fewer loans compared to a traditional 8- to 10-semester BSN program.
Remember, Marian University’s Financial Aid office is available and happy to help you find the best ways to pay for your education. Your Accelerated BSN from Marian may be closer than you think. To start your journey in this exciting career, contact Marian University to learn more about its accelerated nursing programs.