A private education loan is a non-federal loan made by a private financial institution, such as a bank, credit union, or state-affiliated agency, to cover educational expenses. Unlike federal loans, which are guaranteed by the U.S. government and do not primarily rely on a borrower's credit history, private loans are issued based on creditworthiness and often require a strong credit history or a qualified cosigner.
Step 1 – Consider Federal Loan Options First
We encourage students and families to consider federal student loan options before pursuing a private loan. Federal loans offer substantial benefits and protections private loans may not, including fixed interest rates, income-driven repayment plans, forbearance options, and access to federal forgiveness programs.
learn more about federal vs. private loans
Action Item: Aid applicants must accept, reduce or decline any federal loan offered in Student Center each academic year before Cornell will certify a private education loan request.
Step 2 – Identify Your Preferred Lender and Apply
Cornell University is committed to ensuring you receive unbiased information about your student loan options. Cornell recommends using ELM Select – a lender-neutral comparison tool with information about private loans used by Cornell students historically. ELM Select offers comparison tools and helpful financial fundamentals resources to help you select an option that best meets your needs.
When reviewing private loan options, pay close attention to the following:
- Private loans are typically credit-based. Loan approvals and available interest rates depend on your (and/or your co-borrower's) credit history, income, and other “ability-to-repay” indicators.
- Approval criteria and interest rates can vary significantly. Private lenders use their own unique criteria to determine whether you qualify, and at what interest rate. Better rates are generally available to borrowers (and/or co-borrowers) with good credit history and healthy debt-to-income ratios.
- You may need a co-borrower to access the best private loans. Credit history, income, and/or ability/willingness to secure a co-borrower may determine your private loan options. Students with creditworthy co-borrowers typically have access to the best available private loans and interest rates.
- Interest and payments may begin immediately. Repayment options vary by lender and often influence available interest rates, which may be lower if you select an immediate repayment plan vs. a deferred or interest-only repayment plan.
- Read all loan documents carefully. Understand your repayment obligations, right to cancel, and other borrower protections before signing any promissory note.
- Use helpful comparison tools. ELMSelect, university-developed recommended lender lists, and reputable independent private loan marketplace resources can help you compare options. You can borrow from any private lender you prefer.
- Always borrow responsibly. Never borrow more than you absolutely need, don’t borrow at unreasonable interest rates, and always consider the total cost of the loan with interest over time.
Loan Terms
- Are there citizenship, enrollment status, or satisfactory academic progress requirements?
- Do I need a co-signer/co-borrower?
- Are better interest rates available if I have a co-borrower?
- Is the interest rate fixed or variable?
- Are there origination fees?
- What are the annual minimum, maximum, and aggregate borrowing limits?
- What is the difference between immediate, interest-only, and deferred repayment options?
- What repayment terms are available (5, 10, 15 years, etc.)
Repayment Options
- When does interest begin to accrue and how can I avoid interest capitalization (paying interest on accrued interest)?
- Am I allowed to pay interest on the loan while I’m in school?
- When does repayment start, and is there a grace period before repayment begins?
- Are there any loan repayment benefits or interest rate reductions available?
- What is the monthly minimum payment?
- Can I defer repayment if I continue my education, am deployed for military service, or for other reasons?
- What options do I have if I encounter financial hardship or am unable to make a payment on time?
- Are there any penalties or fees for prepayments or early payoff?
Other Features and Benefits
- Does the lender require Cornell to certify private loan requests?
- How are loan funds disbursed?
- Does the lender sell their loans to investors? If so, can the loan terms and benefits change if the loan is sold?
- Under what conditions would I qualify for cancellation, discharge, or forgiveness of the loan?
- How can I access my loan information, make payments, and contact customer service representatives?
- What other features and benefits does the lender offer to help me manage my student loan debt responsibly and repay successfully?
Recommended Private Lenders
Cornell University maintains “recommended private lender” lists to help students and their families identify reputable private lenders offering competitive interest rates, low or no fees, borrower-friendly repayment terms, and other benefits. Recommended lender lists are developed and maintained in the best interests of borrowers and in compliance with applicable federal and state rules. Cornell does not endorse or require students to borrow from any private education lender. Cornell encourages students to review all available loan options and borrow responsibly.
IMPORTANT: Better rates or terms may be available from other lenders. We strongly encourage you to use all available resources to identify the best private loan option for you. You will not be penalized or disadvantaged in any way if you choose another lender.
| Lender | Interest Rate | Origination Fee | Annual Limit | Repayment Terms |
|---|---|---|---|---|
| Citizens | 3.24% - 14.03% (APR fixed) | $0 | Cost of Attendance minus Other Aid | 5, 10, or 15 years |
| Earnest | 2.79% - 16.49% (APR fixed) | $0 | Cost of Attendance minus Other Aid | 5, 7, 10, 12, or 15 years |
| MEFA | 3.29% - 8.74% (APR fixed) | $0 | Cost of Attendance minus Other Aid | 10 or 15 years |
| Nelnet | 3.47% - 10.21% (APR fixed) | $0 | Cost of Attendance minus Other Aid | 5, 10, or 15 years |
| Sallie Mae | 2.89% - 17.49% (APR fixed) | $0 | Cost of Attendance minus Other Aid | 10 or 15 years |
| SoFi | 3.24% - 14.03% (APR fixed) | $0 | Cost of Attendance minus Other Aid | 5, 7, 10, or 15 years |
Lenders listed in alphabetical order, not ranked. Loan approvals, interest rates, and terms are determined by lenders and are subject to change. Lenders may update interest rates and terms at any time – click lender links in the table above for most recent available rates, terms, benefits, and additional loan details.
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Recommended lenders are carefully selected via a Request for Information (RFI) process solely based on the best interests of student borrowers, free from conflicts of interest, and without regard to any financial benefit to Cornell. Recommended lenders are reviewed and updated at least annually based on the following criteria:
- Competitive interest rates and fees – including borrower eligibility criteria, geographic availability, cosigner requirements, fixed and variable rate options, approval rates, and average interest rates.
- Best-in-class borrower benefits – including variety of repayment terms/plans, grace periods, interest rate reductions, cosigner release options, and proactive debt education resources.
- Comprehensive deferment and forbearance options – including delayed payments available during financial hardship, continued education, internships, and military deployment.
- Quality customer service – including robust contact options, availability, responsiveness, proactive borrower support, proactive complaint resolution, and proactive delinquency support/default aversion.
- Regulatory compliance – all lenders must comply with federal and state laws as summarized by Cornell’s Student Loan Code of Conduct.
Step 3 – Approval, Certification, and Funding
Applying for and receiving a private loan is a three-step process: A) you apply to the lender, B) the lender asks Cornell to certify your eligibility, and C) the lender sends funds to Cornell for disbursement.
Critical Timeline Advisory: obtaining private loan funding can be a lengthy process. Please start this process as early as possible – 60 to 90 days prior to your Bursar bill due date – to ensure funds are available on-time.
- Estimate your need: First, check your financial aid offer to determine how much you may wish to borrow. Never borrow more than you absolutely need.
- Complete the lender’s application: Apply directly via your preferred lender's website (links are available via Cornell’s historical lending list). Processing your application typically involves a credit check and the lender may require a cosigner, either to approve or to access the best interest rates.
- Complete a Self-Certification Form: Federal regulations require students to complete a Private Education Loan Applicant Self-Certification Form before loan funds can be disbursed. Your lender will provide this form to you.
Once you have been approved by your lender, they will contact Cornell electronically to request certification. Cornell's certification typically involves two primary checks:
- Enrollment Verification: We confirm your enrollment status (e.g., full-time, half-time).
- Eligibility and Amount: We confirm that the requested loan amount does not exceed the difference between your estimated cost of attendance and the total amount of all other financial aid you will receive (including other loans and work-study).
Note: Cornell does not approve or deny certification requests based on your creditworthiness; that decision is made solely by the lender. Our role is strictly to certify the maximum allowable amount based on your estimated cost of attendance.
After certification, your lender will finalize the loan. Funds are typically transmitted to Cornell for disbursement to your Bursar account on a pre-determined schedule (typically 5 to 10 days prior to the start of each semester). Any resulting credit balance will be processed by the Bursar's Office according to standard refund procedures.
Cornell’s Student Loan Code of Conduct
In accordance with federal regulations, Cornell University maintains a Student Loan Code of Conduct to prohibit conflicts of interest concerning private education loans.
This document confirms our commitment to fair and transparent lending practices, ensuring our staff does not accept gifts, financial benefits, or any form of compensation from lenders. We encourage all borrowers to review this document to understand the ethical guidelines governing our relationship with lenders.