What Are Uncertified Student Loans?
Students are often limited to borrowing up to a school-certified cost of attendance. Uncertified student loans can exceed this limit, giving you more control over how much you can borrow and how you use the funds.
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When borrowing to pay for school, you have a few options for financial aid, including federal and private student loans. However, you may be limited to borrowing up to the cost of attendance your school determines—unless you take out uncertified student loans.
This guide will explain how these unusual education loans work and help you determine if uncertified student loans are right for you.
In this guide:
- What is an uncertified student loan?
- Pros & cons of uncertified student loans
- Who should take out an uncertified student loan?
- Frequently asked questions
What is an uncertified student loan?
An uncertified or non-certified student loan is a loan you can obtain from a private lender that doesn’t limit you to borrowing only the school-certified cost of attendance.
Typically, once your private loan is approved, a lender such as College Ave will require your school to certify the cost of attendance and your financial need before disbursing the loan. While many lenders won’t give you more than this amount, uncertified student loans aren’t subject to that limit.
Unlike with certified student loans, you’ll receive funds from uncertified student loans directly, rather than receiving a refund from your school after your tuition is paid. You can use the money for any purpose, including expenses the school doesn’t consider in estimating your cost of attendance.
Uncertified student loans can be harder to find than typical student loans, and they often have higher interest rates and origination fees. But they may be the only way to borrow if you need more money after exhausting your federal and certified loan options.
Pros & cons of uncertified student loans
Pros
- You aren’t limited in the amount you borrow by your school’s certified cost of attendance.
- You get the money directly from your lender, instead of distributed via your school.
- You have your choice of private lenders, unlike with federal loans.
Cons
- Fees and interest costs are usually higher than for certified student loans.
- Repayment plans may be unfavorable, including having monthly payments due upon loan disbursement, even while you’re in school.
- You can’t typically qualify for these loans unless you have a good credit history and proof of income, or borrow with a cosigner.
- You may not get any of the borrower protections federal student loans offer, including options to pause payments through deferment or forbearance, income-driven repayment options, or the possibility of student loan forgiveness.
- Loan amounts aren’t restricted to the cost of tuition and living expenses, so it’s easy to overborrow.
Who should take out an uncertified student loan?
You should take out private student loans only if you have exhausted federal aid.
Always complete your Free Application for Federal Student Aid (FAFSA) and borrow what you need from the U.S. Department of Education first—then consider how federal student loans, grants, and scholarships would compare with a private loan.
Once you’ve exhausted federal student aid, private student loan lenders could fill in the gap if you still need more money. Not all private lenders offer uncertified loans, but finding one may become necessary if you must borrow more than the school-certified cost of attendance.
If you are going to apply for an uncertified student loan, compare rates from multiple lenders. This will help you find a loan with competitive rates on the best terms. Our guide, on how to get a student loan can help.
Frequently asked questions
Each lender that offers uncertified student loans will have unique requirements. In general, you need fair or better credit, and you’ll have to provide proof you have enough income to repay what you’re borrowing.
If you don’t meet requirements independently, you can ask a creditworthy cosigner to apply with you to increase the chances of approval. The cosigner’s credit score and financial credentials will be taken into account, improving your chances of getting a loan.
Read about the Pros and cons of cosigning a student loan here.
Borrowers typically use uncertified student loans for costs other than tuition that other loans, grants or scholarships didn’t cover. However, be cautious with how much you borrow for living expenses, so you don’t leave school with a ton of student loan debt.
You can borrow both certified and uncertified student loans. You should always max out your student loans from the Department of Education before applying for uncertified (or any) private student loans, to take advantage of lower rates and stronger borrower protections.
