Private Student Loans

File a FAFSA even if you don’t expect to qualify for grants. You may qualify for Federal Direct Loans (need-based subsidized or non-need-based unsubsidized loans). Learn more at FAME’s FAFSA page.

• Have you looked for outside scholarships? If not, look for scholarships.
• Have you investigated tuition payment plans that can be paid monthly through your school?
• Who will be the primary borrower – the parent or the student? Should you share the borrowing?
• Is having the smallest monthly payment the most important aspect to you?
• Is the lowest interest rate most important?
• Are low origination fees important?
• Are tax benefits most important?
• Are you considering home equity?
• Do you know if you have a good credit score (myfico.com)?
• Does the family have other children attending college?
• What are the short- and long-term goals for both the student and family?

Federal Direct PLUS Loans may be a more expensive option, but flexible repayment terms may offset the cost.

FAME’s interactive Student Loan Payment Calculator can help you figure out how much you should borrow based on expected future earnings.

Consider making payments while you are in school. Making interest-only payments can reduce your monthly payment after you graduate and save you money over the life of your loan.

Do your homework — compare interest rates and fees. If a lender is offering a loan without a loan fee or origination fee, is the interest rate higher?

Here are some comparison tables that will help you quickly see differences in some of the student loan options that may be available to you:

• Maine Private Education Loan Network Lender comparison tables
• Federal Direct (Parent/Grad) PLUS Loans vs. Maine Private Education Loan Network Loans comparison chart

Determine whether a fixed or variable rate is a better fit for you and find the lender(s) who offers a rate that suits you. This is a question every borrower must ask him or herself, and there’s no easy answer.

The APR is the cost of interest and fees on a loan expressed over time. The APR is intended to assist you in comparing the cost of various loans that have different fees, rates, and payback periods.

If you need to defer all student loan payments until you finish school or you want to pay interest only, you will need to seek loans that have these options. Some loans may only offer immediate repayment. It’s always good to make sure you have the flexibility to secure a loan deferment because life can change fast.

When you have questions, how do you want them answered? Personal assistance and online capabilities to get your questions answered in a timely manner are important. Find a lender that provides you the service you expect when you need it.

How long has the lender been in business? Do they have a good reputation?

Will the lender hold on to your loan or sell it to another group? If it is sold, learn about what loan terms and benefits might change with your new lender. It can be helpful to work with the same lender from application through your loan being paid in full.

What benefits or discounts are available for things like loyalty or automatic payments? Are there application, origination, or disbursement fees? Is there a prepayment penalty? Are there other fees such as late payment fees and returned check fees, and when do they occur?