General Steps in the Private Student Loan Process
(Steps may vary from lender to lender)
- Borrower (and/or co-borrower) applies with chosen lender, receives a preliminary credit decision and must review the lender’s Application and Solicitation Disclosure (which includes general information about loan rates, fees, and terms).
- Upon conditional credit approval, a Loan Approval Disclosure is presented by the lender and must be accepted by the borrower and co-borrower within 30 days.
- Borrower must also submit a completed and signed Self-Certification Form to the lender. Form is available from the lender or the Financial Aid Office.
- The lender sends a Loan Certification Request to the school.
- The school’s Financial Aid Office certifies the student’s loan after gathering all necessary information and paperwork from the student.
- The Final Disclosure is sent from the lender after the borrower has accepted the terms of the loan offer and the school has certified the loan amount but prior to disbursement. The Final Disclosure includes a Right-to-Cancel notice which gives borrowers a three business day window to cancel their loan without penalty. Lenders are prohibited from disbursing the loan until the expiration of the Right-to-Cancel period.
- The lender schedules the disbursement of funds taking into account the disbursement date requested by the school, the borrower’s Right-to-Cancel period, and the lender’s own rules regarding the Right-to-Cancel period.
- SCC Financial Aid will activate a student’s loan funds no earlier than eight business days after the lender has scheduled the disbursement to allow for expiration of the borrower’s Right-to-Cancel period. Therefore, students are cautioned to allow enough time for a loan to be processed so it will be in place to cover tuition charges by the payment due date prior to each semester.
- The lender disburses the loan proceeds to the school on the disbursement date and the funds are applied first to any existing balance due and then a refund check will be issued to the student for any remaining amount. Refund checks will not be processed until 10% of the semester has elapsed and instructors have turned in rosters verifying student attendance which generally results in refund checks being mailed at the earliest during the 6th week of the semester.