Private loans are intended for students who may need additional resources beyond their federal, state, or SFAI award eligibility. Generally, since interest rates vary, private loans should be carefully researched prior to borrowing. Private loans are bank-based and lenders typically require a credit-worthy cosigner who is a U.S. citizen or eligible non-citizen. Interest rates, fees, and repayment terms can vary from bank to bank. Repayment of private loans may begin immediately.
To review and compare a list of private loans you can use Elm, an online comparison tool that allows you to connect to loan applications. Your loan application will be forwarded to the SFAI Financial Aid Office after your loan has been credit-approved and you have signed the promissory note. Your lender will provide you with current interest rates, processing fees and cosigner requirements. Contact the Financial Aid Office with questions regarding loan eligibility.
Private loan borrowers should be aware of two important changes established by the Truth in Lending Act (TILA), both of which will affect the time required to apply for, and receive, a private student loan:
1. Self-Certification form: As of February 14th, 2010, when a student applies for a private student loan the lender is required to collect a Self-Certification form from the student. This form will be available during the online process or the lender will mail a paper copy to the student. Please note: private loan funds will not be disbursed until the lender receives the Self Certification form.
2. Delays in disbursement: After the lender has received the Self-Certification form from the student, and the loan approval from the SFAI financial aid office, they will send the student a Final Disclosure which details the terms of the loan. Then the lender is required to wait up to 6 business days before disbursing the loan to the school. This delay was included in TILA to give the student (or cosigner) time to cancel the loan after reviewing the terms on the Final Disclosure.
Student Loan Code of Conduct
The purpose of the federal student loan program is to provide the best possible loan terms and service for students and parents who borrow to help finance higher education. San Francisco Art Institute students and families receive trustworthy, reliable guidance from our institution about financial aid. SFAI’s first priority in conducting business with student loan providers is to ensure they have borrower benefits and services that provide for the best interests of student and parent borrowers.
The following guidelines are a framework to provide the best possible loan servicing and benefits for the students served by the San Francisco Art Institute (SFAI) and to avoid conflicts or the appearance of conflicts of interest.
1. SFAI is prohibited from receiving anything of value from any lending institution in exchange for any advantage sought by the lending institution. This prohibits any inappropriate financial arrangements between lenders and SFAI and specifically prohibits “revenue sharing” arrangements and opportunity loan pools. Lenders cannot pay to get on the SFAI’s recommended lender list.
2. SFAI employees are prohibited from soliciting or accepting gifts of more than a nominal value from any lender, servicer, or guarantor. This includes a prohibition for financial aid personal and other officials from trips, catered meals, athletic or entertainment events, etc. paid for by lenders.
3. Financial Aid personnel do not participate on lender advisory boards, but may discuss student loan services and products for students and parents with lenders.
4. SFAI’s list of recommended lenders must be based solely on the best interests of the students or parents who may use the list, without regard to financial interests of SFAI. This ensures that lenders will be those that SFAI has determined offer the best loan services and benefits that are compatible with the needs of students/parents and SFAI’s automated student loan systems. The recommended lender list should be prominently displayed on the campus website.
5. The process by which recommended lenders are selected must be fully disclosed to students. The process should be prominently displayed on the campus website. Students should also be informed that they have the right to use a lender of their own choosing. SFAI will continue to ask students to name their selected lender at the onset of the student loan process for each new borrower and will not select a lender for a first-time borrower. SFAI will not refuse to certify or delay certification of any loan based upon the borrower’s selection of a particular lender or guaranty agency.
6. SFAI must ensure that employees of lenders never identify themselves to students as employees of SFAI. No employee of a lender may ever work in or provide staffing assistance to SFAI’s financial aid office.
7. Financial Aid personnel are not to purchase stocks or accept stocks from banks that provide student loans to SFAI students.
8. SFAI departments and affiliated organizations should not enter into any contractual preferred student loan consolidation arrangement with any lender, servicer or guarantor.