FAQs

General Questions

1. What is cuStudentLoans?
2. What is LendKey?
3. What is a credit union?
4. What is the cuScholar Private Student Loan?
5. What is the difference between a private student loan and a federal student loan?
6. How do I know if I’m eligible for federal aid?
7. How much financial aid am I eligible to receive?
8. What is an Expected Family Contribution?
9. What is Cost of Attendance?
10. How can I learn more about my financial aid options?
11. Does applying for a federal loan impact my ability to obtain the cuScholar Private Student Loan?

Loan Eligibility

1. Who is eligible for the cuScholar Private Student Loan?
2. What is a cosigner?
3. Is a cosigner required to obtain the cuScholar Private Student Loan?
4. Will the cosigner’s credit record be affected?
5. Is the cosigner responsible for repaying the loan?
6. What is the cosigner release process?
7. How much can I borrow?
8. Do I need to be enrolled in an educational institution to complete the application process?
9. Why isn’t my school on the list?
10. How is the eligible schools list determined?

Application Process

1. When should I begin the process?
2. How do I apply for the cuScholar Private Student Loan?
3. How does the cosigner complete his/her portion of the application?
4. Will both the borrower and cosigner’s credit be checked?
5. What is ACS?
6. What documentation is required in the application?
7. What proof of enrollment do I need to provide?
8. What proof of income do I need to provide?
9. How do I become a credit union member?
10. What is school certification and how can it affect my loan?
11. How do I check the status of my application?
12. What do the stages of the status bar mean?
13. How long is the process?
14. After filling out an application is there a commitment to borrow?

Loan Terms

1. What are the rates and fees on the cuScholar Private Student Loan?
2. How is the interest rate calculated??
3. What is the LIBOR Index?
4. Do you offer any borrower benefits?
5. What is the repayment term of the cuScholar Private Student Loan?
6. How soon will a borrower receive the loan proceeds?
7. How often is accrued interest capitalized?

Repayment

1. What is the In-School Repayment period?
2. What is a Grace Period?
3. What is a Proactive Payment?
4. What repayment options are available during the in-school period?
5. When do borrowers enter full repayment status?
6. How are payments made?
7. Can a borrower prepay the loan at any time?
8. What options are available for borrowers struggling to make payments?
9. What are the forbearance policies?

Privacy & Security

1. Will my personal information be shared with third parties?
2. How is financial information protected?

General Questions

What is cuStudentLoans?

cuStudentLoans is a network of over 160 not-for-profit credit union lenders who use common underwriting and pricing to provide members with an affordable private student loan program. This program is composed of two loan products: the cuScholar Private Student Loan and the cuGrad Private Student Loan Consolidation. cuStudentLoans is managed by a CUSO (Credit Union Service Organization) called Member Student Lending, LLC.

What is LendKey?

LendKey Technologies, Inc. is the cloud-based technology company that powers cuStudentLoans.org. LendKey works closely with the Member Student Lending CUSO to ensure credit union members receive exceptional service. LendKey is also the servicer for the cuScholar Private Student Loan. For more information about LendKey, please visit www.lendkey.com.

What is a credit union?

A credit union is a member-owned financial institution providing credit at competitive rates and other financial services to its members. To learn about the benefits of credit unions, please visit our About Credit Unions section.

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What is the cuScholar Private Student Loan?

The cuScholar Private Student Loan is issued from a not-for-profit credit union participating in the cuStudentLoans program and can be used to pay for qualified educational expenses including tuition, room and board, books, and other school related expenses. Private student loans serve as a way for students to fill the funding gap between the cost of attending school and the amount of
federal loans, grants, and available scholarships.

What is the difference between a private student loan and a federal student loan?

Federal student loans follow guidelines set forth by the U.S. Dept of Education and typically offer fixed and lower interest rates compared to private student loans. However, federal loans, unlike most private loans, have borrowing limits, which may not allow a student to borrow enough to cover the entire cost of education. Private loans help students fill the funding gap between the cost of attending school and the amount of federal loans, grants, and available scholarships. Both private and federal student loans typically allow students to defer payments while in school and some offer economic forbearance options once a student completes school. Unlike federal loan programs, private lenders assess the credit history of the borrower and cosigner before making a loan.

How do I know if I’m eligible for federal aid?

Eligibility for federal, state and university funded financial aid is determined by completing the Free Application for Federal Student Aid (FAFSA). All students are strongly encouraged to apply for federal aid by completing the FAFSA, which can be obtained online at www.fafsa.ed.gov.

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How much financial aid am I eligible to receive?

The financial information you provide in the Free Application for Federal Aid (FAFSA) is used by the government to determine your Expected Family Contribution (EFC), which is the amount you and your family are expected to pay towards your education. The EFC is then subtracted from the Cost of Attendance (COA) for your respective school to determine the amount of financial aid you are eligible to receive.

What is an Expected Family Contribution?

The Expected Family Contribution (EFC) is a calculated assessment of how much your family is expected to contribute to your college costs. The EFC takes into consideration your family’s financial strength – income and assets. Other factors considered include the number of family members and number of family members in college.

What is Cost of Attendance?

The Cost of Attendance (COA) is the total cost as determined by a school’s financial aid office including tuition and fees, room, board, books, transportation and miscellaneous expenses. Every school has a slightly different Cost of Attendance, but all must meet standard guidelines as set by the U.S. Department of Education. The Cost of Attendance represents the maximum amount of financial aid, grants, scholarships and student loans that can pay to an account during an academic period. This prevents students from applying for an excessive amount of student loans beyond the established Cost of Attendance.

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How can I learn more about my financial aid options?

It is recommended that you consult with your school’s financial aid office, and visit the College Resource Center where you can read more about all of your financial aid options and refer to our financial aid glossary to better understand the terms you will need to know.

Does applying for a federal loan impact my ability to obtain the cuScholar Private Student Loan?

No. Students are encouraged to explore and exhaust all federal aid options first, and then use private loans to help pay the remaining education expenses.

Loan Eligibility

Who is eligible for the cuScholar Private Student Loan?

To apply for the cuScholar Private Student Loan, you must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible school, and you must be or become a member of a participating credit union.

If you’re not currently a member of a credit union, you will be prompted to select one that you can join during the application process.

You or your cosigner also must meet our credit requirements. Choosing a creditworthy cosigner will increase the likelihood of being approved and may lead to a lower loan rate. You can apply without a cosigner if you meet all of the credit criteria by yourself.

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What is a cosigner?

A cosigner is a parent, grandparent, guardian or other adult who is creditworthy and willing to assume legal responsibility for the loan liabilities along with you. The cosigner must be a U.S. citizen or permanent resident.

Is a cosigner required to obtain the cuScholar Private Student Loan?

In most instances, a cosigner is required to obtain the cuScholar Private Student Loan. A creditworthy cosigner increases the likelihood of your loan approval and may lead to a lower loan rate. Creditworthy students that meet the credit requirements may apply without a cosigner.

Will the cosigner’s credit record be affected?

Yes, in a cosigned loan both the borrower and the cosigner are jointly liable for making all loan payments. The loan will appear on both the borrower and cosigner’s credit report.

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Is the cosigner responsible for repaying the loan?

If the borrower fails to repay the loan, then the cosigner is responsible for repaying the loan. However, the cosigner may be released of this obligation once the borrower is able to meet certain criteria to determine creditworthiness and makes 24 consecutive and on-time full payments of principal and interest during the Repayment Period.

What is the cosigner release process?

Cosigner release is available for creditworthy borrowers after making consecutive on-time principal and interest payments during the Repayment Period.

The borrower may request for cosigner release and retain the loan on a stand-alone basis, if the following requirements are met:

  • Borrower has made 24 consecutive, on-time payments of principal and interest during the Repayment Period.
  • Borrower meets minimum credit requirements, based on a new credit pull initiated at the time of the request.
  • Borrower meets minimum income requirements, based on proof of income documents provided at the time of the request.

*Note: The cosigner release process is initiated only after a request has been emailed to customer.care@custudentloans.org. It may take up to 7-10 business days to process a cosigner release request.

How much can I borrow?

The minimum you can borrow is $2,000 per year. The maximum you can borrow lifetime is the certified amount determined by your school, up to $120,000 for undergraduate students and $160,000 for graduate students. The school certified amount is typically the Cost of Attendance (COA) less any other financial aid received.

Do I need to be enrolled in an educational institution to complete the application process?

Yes, you must provide proof of enrollment at an eligible school within the cuStudentLoans program to complete the application process.

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Why isn’t my school on the list?

Not all educational institutions participate in or are eligible for our program. Unfortunately, we’re not able to accept a loan application if your school is not on our eligibility list.

How is the eligible schools list determined?

School eligibility is determined using a blind study that assesses a variety of factors. The eligible schools list is reviewed by lending partners every year.

Application Process

When should I begin the process?

We encourage you to start early. You can start the loan application process once you know what school you will be attending, the Cost of Attendance for the current academic year, and can provide proof of enrollment. The process can take from 2-8 weeks depending on the borrower, school, and time of year.

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How do I apply for the cuScholar Private Student Loan?

The application process must be completed online at apply.custudentloans.org.

How does the cosigner complete his/her portion of the application?

During the application process, cosigners will be asked to complete their own application and create an account using a different email address than the borrower’s account. Cosigners complete the same application procedures as the borrower for joint credit.

Will both the borrower and cosigner’s credit be checked?

Yes. During the application process, and as part of the underwriting process, a credit bureau report is pulled on both the borrower and cosigner. The borrower’s creditworthiness or ability to repay the loan is assessed based on the credit of the borrower, the credit of the cosigner, as well as the
borrower’s academic attributes. The borrower and cosigner credit reports will expire after 90 days.

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What is ACS?

ACS (Academic Credit Score) is a proprietary scoring model that assesses borrower creditworthiness by taking into account not only the credit bureau data, but also the student’s academic characteristics such as GPA, course of study, and class standing.

What documentation is required in the application?

After you are conditionally approved based on credit, you (and your cosigner) may be asked to submit the following required documents:

  • Proof of Identity
  • Proof of Enrollment
  • Proof of Income

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What proof of enrollment do I need to provide?

If you are a returning student, you must provide an unofficial copy of your most recent graded transcript as proof of enrollment at the school you are attending. If you are an incoming freshman, your school will confirm your enrollment during the certification process.

What proof of income do I need to provide?

You must provide a copy of your two most recent pay stubs within the last 60 days. Pay stubs submitted for review must clearly display the following five pieces of information:

  • 1) Employer Name
  • 2) Pay Period
  • 3) Employee Name
  • 4) Gross Income
  • 5) Deductions

(See an example pay stub with the required fields)

Depending on your type of employment or financial situation, we may be able to accept alternate proof of income:

  • If you are self-employed, you must provide a 2011 and 2012 tax return and required schedules.
  • If you are retired, you must provide a pension and/or social security award letter or 1099R.
  • If you are a commission-based employee, you must provide a 2011 and 2012 W-2 and two recent pay stubs within the last 60 days.

If the loan is cosigned, only the cosigner needs to submit these documents.

How do I become a credit union member?

If you are not a member of a credit union, we will match you with a participating credit union that you’re eligible to join during the application. You will need to complete membership before your loan can be reviewed for final approval. If you decide to cancel the loan request there is no further obligation for membership. Learn about the benefits of credit unions and the simple membership process in About Credit Unions.

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What is school certification and how can it affect my loan?

Before the loan can be finalized, the school must authorize the loan disbursement date and loan amount. This process is completed by the school’s financial aid office where they certify that the student attends the school and meets a minimum registration status of half-time or greater.

School certification also acts as a borrower protection to prevent over borrowing. The school has authority to reduce a private student loan to fit within the Cost of Attendance after all other financial aid is paid to the account.

The certification request is sent to the school through an electronic servicer (ELM, Great Lakes, etc.) or faxed upon request. Once the certification is returned, the borrower can accept the final disclosures and the loan will be disbursed.

Schools will vary on the amount of time it takes to process a student loan certification. Be advised that it usually takes 7-10 business days, but can take longer for a school to respond to a certification request after we have sent it.

If you are concerned about meeting your tuition deadline, be sure to apply early and stop by your financial aid office after the certification has been made available to confirm an estimated processing time.

How do I check the status of my application?

The status of your application is available by signing in to your account. The green status bar you see immediately after login indicates which state your application is currently in.

What do the stages of the status bar mean?

Applying:

  • The borrower started the application but it has not been credit reviewed for one of two reasons:
  • The borrower hasn’t submitted the application yet
  • The borrower invited a cosigner that has yet to complete his/her portion of the application

Reviewing:

  • cuStudentLoans forms an initial credit decision on the borrower and cosigner (if applicable)

Gathering:

  • The borrower is conditionally approved
  • The borrower uploads the requested documents
  • The borrower completes credit union membership (if applicable)

Approving:

  • The credit union lender makes a final review of the application

Signing:

  • The application is final approved
  • The borrower signs the loan agreement
  • The school completes certification
  • The borrower signs final disclosures

Disbursing:

  • The loan disbursement is scheduled

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How long is the process?

You should allow yourself 6-8 weeks from the time of the initial application until your school receives your funds. Every private student loan must be sent to the borrower’s school for certification prior to being finalized.

Remember, once the process is complete, the funds may not be disbursed to the school right away. The funds will be transferred on a date specified by the school.

After filling out an application is there a commitment to borrow?

No. A borrower may withdraw a request at any time and has up to 30 days from the loan disbursement date to return the money and avoid being charged any fees or interest.

Loan Terms

What are the rates and fees on the cuScholar Private Student Loan?

The cuScholar Private Student Loan is a variable rate loan. Please visit Rates & Fees for the current rates.

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How is the interest rate calculated?

Interest Rate = Base Rate + Loan Margin

The Base Rate is the average of the 3-Month LIBOR (London Interbank Offered Rate) Index, which is a variable component that resets quarterly on the first day of January, April, July, and October.

The Loan Margin stays constant for the life of the loan and is determined at loan inception, depending on the borrower’s credit history and ACS Grade.

What is the LIBOR Index?

The London Interbank Offered Rate (or LIBOR) is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks. This offered rate is the funding cost to a bank and is commonly used as a benchmark for the bank’s lending rate.

Do you offer any borrower benefits?

Yes! Qualified borrowers can enjoy:

  • No origination fee for all student borrowers
  • 1% interest rate reduction once 10% of the loan principal is repaid during the full repayment period
  • 30 day no-fee return policy allows you to cancel the loan within 30 days of disbursement without fees or interest
  • Cosigner release available for creditworthy borrowers after 24 consecutive on-time principal and interest payments

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What is the repayment term of the cuScholar Private Student Loan?

The repayment term begins six months after the borrower graduates or ceases to be enrolled at least half-time in an eligible degree-granting program. Once repayment begins, the borrower has 10 years to repay the loan.

How soon will a borrower receive the loan proceeds?

The loan proceeds will be sent directly to the school by check or through electronic funds transfer (EFT). The check will usually be mailed within 5-7 business days of the borrower accepting their final disclosure unless the school requests a later date.

How often is accrued interest capitalized?

Unpaid interest accrues while the borrower is in school. Upon entering full repayment, all accrued and unpaid interest is capitalized (or added) to the principal balance once at the time repayment begins.

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Repayment

What is the In-School Repayment period?

The in-school period lasts while the borrower is enrolled at least half-time and includes a six month Grace Period once the borrower leaves school. During this time, the borrower is required to either make full interest payments or a monthly $25 Proactive Payment. Any unpaid interest continues to accrue during the in-school period.

What is a Grace Period?

The Grace Period is a six month period of time that begins once a borrower graduates or is no longer enrolled at least half-time in a degree granting program. After the Grace Period, the borrower must begin making regular principal and interest payments. Borrowers are required to either make full interest payments or a monthly $25 Proactive Payment during the Grace Period.

What is a Proactive Payment?

A Proactive Payment is a $25 monthly payment the borrower must make while they are in school. The borrower will begin making full principal + interest payments once they have separated from the school or dropped below half-time status. The Proactive Payment helps the borrower demonstrate financial discipline and saves the borrower interest expenses over the life of the loan.

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What repayment options are available during the in-school period?

Two in-school repayment options allow the borrower to defer full principal and interest payments until six months after separating from the school:

  • Interest-Only Payment: the borrower is immediately responsible for making full monthly interest payments on the loan while enrolled in school. Six months after separating from the school or ceasing to be enrolled at least half-time in a degree-granting program, the borrower enters repayment status and is responsible for making full interest and principal payments.
  • Proactive Payment: while enrolled at least half-time in a degree-granting program, the borrower is only required to make monthly $25 Proactive Payments during the in-school period. Any unpaid accrued interest is capitalized (or added) to the outstanding loan amount once at the end of the in-school period. Six months after separating from the school or ceasing to be enrolled at least-half time in a degree granting program, the borrower enters repayment status and is responsible for making full interest and principal payments.

When do borrowers enter full repayment status?

Borrowers are given a six month Grace Period once they graduate or separate from school before they enter repayment status. Once borrowers enter repayment status, they are responsible for making full principal and interest payments.

How are payments made?

All monthly loan payments are made to the servicer, LendKey, using either an electronic transfer from a financial institution account designated during the application process or mailed in by check. Borrowers can set up automatic monthly ACH payments by logging into their account, clicking the Payments tab, and Manage Payments. Please have the following information available: Financial Institution Name, Account Type, Account Holder Name, Routing Number, and Account Number.

Borrowers can submit payments via paper check to the following loan payment address:

LendKey
P.O. Box 824575
Philadelphia, PA 19182-4575

Please write your Loan ID and the payment date in the memo line. For example, if your payment is for your March 1st invoice, please put “03/01/12” next to your Loan ID.

Note: Please do not send a check payment before you receive your statement for that month.

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Can a borrower prepay the loan at any time?

Yes, a borrower may prepay the loan either partially or in full at any time without incurring any fees or penalties. Please submit prepayments electronically through your account or via paper check and ensure to write your Loan ID and “Toward Principal” in the memo line.

What options are available for borrowers struggling to make payments?

Some borrowers may not have found employment yet six months after leaving school; therefore, borrowers may request to pay just the interest expense on the loan for the first two years while in repayment status. This is referred to as the Initial Interest Only option. The Initial Interest Only option can be requested in writing during the six month Grace Period.

Borrowers more than two years out of school may request forbearance.

What are the forbearance policies?

If you are unable to make your payment due to economic hardship, unemployment, underemployment, returning to school or medical reasons, you may be eligible for forbearance. The maximum allowable forbearance time is 18 months granted in increments of up to 6 months. You must complete a forbearance form for consideration and are responsible for all payments until notified of your request being approved.

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Privacy & Security

Will my personal information be shared with third parties?

Only information that is necessary and required to complete the loan application process, make payments, and transfer funds may be shared. Please consult our Privacy Policy for additional details.

How is financial information protected?

Our servers are equipped with Secure Socket Layer (SSL) certificate technology, which encrypts the user’s entire online session. Automatic sign out occurs after a period of inactivity. All banking information and social security numbers are stored in a secure off-site data center. All users must pass through our secure verification systems to prevent identity theft. Please consult our Privacy Policy for additional details.

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