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Private Educational Loans

What is a Private/ Alternative Educational Loan?

A private educational loan is a non-federal educational loan through a private lending institution. Each lender has different eligibility requirements (e.g., degree status, enrollment status, US citizenship status), loan rates, repayment terms and conditions. Some lenders may also require payment of interest while students are in school.

Consider Federal Aid First

We highly recommend you complete the Free Application for Federal Student Aid (FAFSA) and apply for any student financial aid for which you are eligible. Private educational loans should be considered after state and federal sources of financial aid have been utilized. Before choosing a private loan, review information for the Parent Loan for Undergraduate Students (PLUS).

  • You have a 30-day window to apply for a private educational loan and a PLUS loan to choose the best rate. This is called the “shopping period”. Once the 30 days are up, the credit checks for all of these loans will be consolidated to one credit check.

Things to Remember About Choosing a Private Loan

  • Students who are not meeting SAP should always check their lender’s SAP borrowing policy before applying.
    • If using  ELMSelect to research lenders, students should use the Sort & Filter option and indicate: “Satisfactory Academic Progress: Not Required” before considering the lenders listed there.
  • Register for ALL of the courses you plan to take BEFORE you apply for your loan to assure your loan is certified for the correct amount. Increases may not be possible after the loan is certified.
  • Apply for the private educational loan within 90 days of the end of the semester to ensure your credit does not expire. If your credit check expires, you will need to complete a new application.
  • After the application approval, choose the lender that fits your needs the best.
  • A separate loan application is required for summer session(s) and for each academic year.

Montclair State University does not endorse particular private loan providers. The list of lenders provided have successfully conducted business with Montclair State University in the past. Neither Montclair State University nor the Financial Aid Office promote, endorse or recommend any of these loan products or lenders by including them on the list. You have the right to select the private educational lender of your choice.

Private Educational Loan Application

Private education loans vary by lender. You should compare the loan terms and conditions and choose the one that best fits your situation. You can compare private loans from multiple lenders using either of the following options:

The Elm Select Tool displays a neutral list of private lenders that Montclair State University students have borrowed from in the past. Montclair State University does not prefer, recommend, promote, endorse or suggest any of these lenders.

The use of a lender listed on ELM Select is not required. You may choose to work directly with a particular educational lending institution or use a multi- lender, single application service. If you do choose a multi-lender, single application service it will not include a complete list of lenders for whom we have certified loans in the past.

Here are several questions you may want to consider when choosing a private loan:

  • What is the interest rate? Is it fixed or variable?
  • What fees must be paid and when are they due?
  • What are the repayment terms? Is there a grace period? Are there deferment or forbearance options?
  • What will my monthly payment be?
  • Do I need to be admitted to a degree or certificate program?
  • Do I need to be enrolled at least half-time?
  • Is there a Satisfactory Academic Progress requirement?
  • Can the loan be applied to past periods of enrollment? If so:
    • Within what timeframe must students apply if they are still enrolled at Montclair State University?
    • Within what timeframe must students apply if they have withdrawn or graduated from Montclair State University?

Refund Checks

If you have received a refund after all your loans have been disbursed the following options are available:

  • You may keep the refund and use for winter or summer classes and/or educational expenses.
  • You can request for a reduction of their loan in the current semester, cash the check and then pay student accounts the balance owed from the loan reduction (Recommended).
  • You can request a reduction of the loan for the upcoming semester and use the refund to pay the balance for the upcoming semester.
  • You can also use the money to pay the lender back directly. If you choose this option, make sure you will not need the excess later as we may not be able to increase your cost of attendance to allow for an increase in the loan. (Consult a loan counselor to ensure this is the best option)

Private Loan Policy

Montclair State University is a school that uses a “Historical Lender List.” Historical Lender Lists are a neutral approach that do not offer preferential treatment towards lenders. Montclair State University does not promote the use of any specific lender.

  • Advising may be provided to students regarding the school’s ability to certify loans from specific lenders due to eligibility requirements
  • Advising may be given as requested on how to find a loan appropriate to the student’s eligibility requirements

Definition of Private Educational Loan

Private educational loans are exclusively for educational purposes and are defined as loans that are not provided through the Federal Direct Lending program (Stafford, PLUS, Perkins).  Other private loans that are not exclusive to education (e.g. personal loans, line of credit, etc.) may be used by students and/or families for educational purposes are not defined as private educational loans.

School Certification Requirements

Montclair State University (hereby referred to as the University) does not require that a student obtain a private educational loan. It also does not require that the loan be certified by the University. However, the University will not include any loan that does not require school certification on the University’s historical list.

Loans not certified by the University will not be processed and posted through financial aid.

If a loan is not certified by the University, the University will not certify that loan to be included in future consolidation loans where required.

ELM Select

The University uses ELMSelect for processing certifications, making modifications and disbursements. The ability to process, certify, or disburse loans through ELM select is not required. If a lender does not process funds through ELMSelect, they may use another means to have us certify the loan.

Loans for Students Entering With, But Not Limited To, F or J Visas

Policies: Lenders who specialize in lending to only international students do exist and are listed on, as well as on other lending sites.
 Students are encouraged to review all of the lenders that may be available to them on, as more lenders are adding products for international students and this policy applies to certification requests submitted to financial aid for international students. 

Procedures: Montclair State University receives certification requests for students who are entering school with, but not limited to, F or J visas.

In order to certify these loans, Montclair State University must ensure that the student is meeting the minimum registration requirements as set out by U.S. federal regulations:

  • Graduate Degrees other than the Artist’s Diploma: enrollment in a minimum of 9 Credits
  • Artist’s Diploma: enrollment in a minimum of 6 Credits
  • Undergraduate Degree: enrollment in a minimum of 12 Credits 

In addition, Montclair will only certify the private educational loan if the student is registered and an accurate Cost of Attendance/Budget (COA) is calculated.

  • Montclair will certify loans based on the academic year (AY) which begins with fall.
  • COA is based upon semester enrollment. 
  • A student seeking a loan for a full year in January will have a loan certified only for the terms within the AY in which the student will be enrolled (spring or spring/summer). 
    • A new loan must be submitted for the next fall/spring.
  • Prior to certification, students need to complete a Precertification Form for review. Students must be logged into their email account to respond.
  • The student who borrows from an exclusively international lender will have an opportunity to respond with a Cost of Attendance Re-evaluation Request (with supporting documentation) before the loan is sent to the lender for final processing. A link to the Cost of Attendance Re-evaluation Request Form is provided on the Precertification Form.
  • Prior to loan disbursement, registration will be monitored for all students with a private educational loan.
    • If student withdraws from courses prior to the end of Add/Drop or they defer their enrollment to a later date, the private educational will be cancelled and/or rejected via ELM.
    • Records of these transactions will be maintained within Financial Aid for a period of three years.

Single Application/Multiple Lender Service Sites

The University permits loans to be obtained by the student outside of the historical lender list and the ELMSelect site. The University may provide information for an external third party site that provides a single application platform for multiple lending services as long as it:

  • Provides a beneficial service to the student/family.
  • Includes loans that are part of the historical list.
  • Does not promote preferred lenders above any of the lenders included on the site.
  • The University will provide a link to the site, but will also include a disclaimer that not all loans are provided from the historical list.
  • The University encourages students to research their options carefully before choosing a loan through a single application platform service.

Non-Traditional Educational Funding

The University does not promote private educational funding products that do not fully disclose the nature of their costs. For example, Income Share Agreements (ISA) must disclose that their product does not provide the same protections that are given through The Truth in Lending Act. Lender disclosures may not present any information that is potentially misleading such as implying that there is no interest paid on the loan. To be included on ELMSelect or any other listing service that is used for processing by the University, the product must be able to be displayed under its own category where the University can add disclaimers and provide information to the student about ISA and the difference between an ISA and a loan.