Eligibility for private loans is based on credit-worthiness and ability to repay, not on financial need. While private loans are borrowed by the student, most private loans require a co-signer and offer deferment of principal payments while the student is enrolled.
We recommend that students and families read Questions to Consider before Selecting a Private Loan (PDF) to become more familiar with this type of loan.
Preferred Lender List Disclosures
In an effort to provide better counseling services to our students, Luther College has entered into a preferred lender arrangement (PLA). Federal and state law mandates that we must provide the following disclosures in association with this process:
- Students may borrow from any lender they choose and are not required to use a lender on Luther's preferred lender list.
- The lenders on the list were selected based on internet research conducted by the Financial Aid Office and through use of a Request For Information process.
- Luther College evaluated and selected lenders based on interest rates, origination fees, borrower benefits, electronic application and processing, historical use by current and former students and lender reputation.
- This list does not contain affiliated lenders.
- Luther has a published Student Loan Code of Conduct that must be followed.
Maximizing Federal Financial Aid First
Federal and state law also mandates that we disclose the maximum amounts of Federal Grant and Loan assistance that are available. Maximum eligibility for Federal financial aid is based on the results of the FAFSA and is outlined on the student's award letter. Federal financial aid has better terms and conditions than private student loans and we strongly encourage students to utilize that aid first. The following is a list of maximum awards in each program:
- Pell Grant - $5,550
- SEOG - $4,000 (Award amounts are dependent on federal funding with a typical Luther award maximum being $1,500)
- TEACH Grant - $4,000
- Stafford Loan - $5,500 (freshman class); $6,500 (sophomore class); $7,500 (junior class and above); Independent students can receive an additional $4,000 (freshman and sophomore class) or $5,000 (junior class and above)
- Perkins Loan - $5,500 (Award amounts are dependent on federal funding with a typical Luther award maximum being between $1,000 - $2,000)
- PLUS Loan - a credit-based loan for parent borrowers with a maximum determined by the difference between cost of attendance and the student's financial aid award
The Financial Aid Office is utilizing FASTChoice, a loan comparison tool offered by Great Lakes Higher Education Corporation which allows students to compare up to three different loans side-by-side.
By clicking on the following link, you will be directed away from the Luther College Financial Aid Office website. We encourage you to bookmark this page for future reference. Enter FASTChoice now to view private loan products that are a part of the preferred lending arrangement.
Once a borrower has been approved for a loan, it is extremely important to complete the necessary paperwork to continue the loan on to disbursement. These steps must be taken to assist with the timely arrival of loan proceeds.
Preferred Lender Arrangements are required to be reviewed annually to ensure that competitive products that are in the best interest of the student borrower are being offered. Please provide us with feedback regarding any positive and/or negative aspects that may have been experienced when working with a particular lender. Feedback can be left at firstname.lastname@example.org.