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Paying for College

Private Loans

If the combination of your savings, financial aid and family resources aren’t enough to pay for your education, you might want to consider a private educational loan.

As a general rule, you should take out federal student loans before turning to private educational loans. However, you may find some instances where a private loan is your best choice.

Federal loans require that you attend college as at least a half-time student. For a school on a semester basis, half-time status equals at least 6 hours for an undergraduate student and at least 4.5 hours for a graduate student. If you’re not taking enough classes to qualify, a private loan may be your only alternative.

In addition, you have many choices when it comes to finding a lender for a private loan. Some of them may offer better terms than federal loans, especially for graduate and professional students.

For example, KHEAA’s sister agency, the Kentucky Higher Education Student Loan Corporation (KHESLC), offers the only state-based loans for students and parents: Advantage Education Loan (students) and the Advantage Parent Loan (parents of students).

Unlike the Federal PLUS Loan, which is available only to parents of undergraduate students, the Advantage Parent Loan can be used by parents to help graduate and professional students. It also carries a lower interest rate than the PLUS Loan.