Advantage Education Private Student Loan Review
About Advantage Education
This Advantage Education private student loan review looks at this loan product administered by the Kentucky Higher Education Corporation. The Kentucky Higher Education Corporation (KHECorp) is the parent body that oversees the operation of the student financial assistance system in Kentucky. KHECorp has three parts that provide resources for student education including scholarships, grants, and student loans. including private student loans. The sections below describe the three-part student financial assistance system.
(1) The Kentucky Higher Education Student Loan Corporation is a private corporation created by state law in 1978. The mandate authorized the Corporation to finance, issue, and service student loans. The State of Kentucky backs the loan and grant programs. Kentucky revenues and guarantees assure adequate sources of funds.
The Kentucky Higher Education Student Loan Corporation was authorized by Kentucky law (Revised Statutes 164A). The law created KHESLC as a private corporation connected to the Kentucky government. The corporation has powers to create and manage Advantage Education Loans, Advantage Refinance Loans, and Advantage Education Private Student Loans to student and parent borrowers. KHESLC works with two other parts of the state’s student loan structure that respectively provide non-repayable student assistance and collections.
(2) The Kentucky Higher Education Assistance Authority (KHEAA) was established in 1966 as a state agency. The purpose of the Association was to improve student access to higher education in Kentucky. In addition to student loan and education finance education, the KHEAA provides non-repayable student assistance. The assistance programs include state funded grants, scholarships, and work-study programs.
The KHEAA provides support services for student loan administration. KHEAA Verify in an online FAFSA verification service. The service helps students correct FAFSA applications ad verify information. KHEAA works to facilitate private loan placement including applications, underwriting, and disbursement for lenders that wish to outsource loan origination services.
(3) The Asset Resolution Corporation (ARC) was created by Kentucky law in 2012. The corporation provides debt resolution service for student loan obligations. The ARC is the collection function for the Kentucky student loan system. The full-service student loan collection agency specializes in defaulted student loans and similar education fund receivables. The ARC directly or through agents collects and adjusts unpaid student loan debt.
What types of loans does Advantage Education offer?
The Corporation issues Advantage Education Loans to students and parents of students. Borrowers can use this program without limitation by geographic location. Education loans provide fixed interest rates and ten-year payment schedules. The loan products include Advantage Parent Loan to parents of students.
The Corporation provides Advantage Refinance Loans to borrowers in various stages of repayment. Borrowers must reside, live, or attend school in an eligible state to use this program. Advantage Education Loans Student Loan Refinance (private loans) aren’t available in 18 states and the District of Columbia.
- Washington, D.C. and the eastern states of Rhode Island, Vermont Delaware, Maine, Maryland, and New Jersey.
- The Mid-West states of Illinois Iowa, , Michigan, Minnesota
- The Western states of North Dakota, , South Dakota Nevada, and Montana,
- The northwest states of Oregon, Washington, , Idaho, and Alaska
Advantage Education Private Student Loan Review of Rates and Eligible States
Current fixed Annual Percentage Rate range -3.75 percent to 6.99 percent. Private student loans are only available to borrowers that live or attend school in the below-listed states.
- South: Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Texas, Tennessee Virginia, and West Virginia
- East: Connecticut, Massachusetts, New Hampshire, New York, Ohio, Pennsylvania,
- Midwest: Indiana, Kansas, Missouri, Nebraska, Wisconsin,
- West: Arizona, Alaska, California, Colorado, Hawaii, New Mexico Oklahoma, Utah, and Wyoming
This Advantage Education Private Student Loan Review will focus on the Advantage Education Private Student Loan
How does an Advantage Education Private Student loan work?
Advantage Education Private Student Loan is a fixed annual percentage rate loan from the Kentucky Higher Education Student Loan Corporation (KHESLC). Applicants must live, reside, or attend school in a state that permits this loan product. The private loan offers longer forbearance than typical student loans. Loans can be used for current tuition and other official school fees and expenses. Borrowers can also use private student loan funds to pay past-due tuition.
Undergraduate and graduate students are eligible to apply for Advantage Education private loans. The required student status is enrollment full or part-time at an eligible institution. To qualify, applicants must be enrolled in school at least part-time. The private loan program offers flexibility as to the level of attendance.
Typical student loan programs require full-time attendance, and a smaller group permits part-time enrollment at one-half the normal course load or greater. Advantage Education private loan student applicants can be enrolled at less than half-time attendance if they begin immediate repayment. All approved applicants must attend schools that are eligible under Title IV of the Higher Education Act to process US federal student loans and financial aid. Eligible participants include non-profit educational institutions.
Kentucky Higher Education Student Loan Corporation private loans work well for traditional, degree-seeking students and for those pursuing other types of education and training. KHESLC provides private loans for degree programs and for non-degree education such as certification coursework. The adaptability of the KHESLC loan program stands out and is an excellent resource for non-traditional students pursuing a wide range of educational objectives.
The application process uses a hard credit check to produce the terms of interest and repayment. A hard credit check can affect credit scores. Students cannot get prequalified and see an estimated rate and repayment schedule with a soft credit check.
Credit scores are an essential part of the loan application. The private program does not disclose a minimum credit score for eligibility. The typical loan creditworthiness standards are credit ratings, income, and debt-to-income ratio and these are likely to factor into the KHESLC decision process. Similar loan programs require scores in the range of low to mid 600’s.
The private loan program requires a minimum income of $1,500 per month and the typical approved borrowers and cosigners’ income level is $3,000 per month or more. Eligible borrowers must be US citizens or permanent residents. Applicants can get loans despite past bankruptcies if more than seven years have passed. DACA borrowers are not eligible for KHESLC private loans.
The Kentucky Higher Education Student Loan Corporation is known for flexibility that can help non-traditional students. KHESLC offers private loans that can help traditional students attending full or half-time. The loan programs support undergraduate and graduate students. The private loan provides a greater degree of flexibility than typical student loan programs.
KHESLC can work with students that attend part-time and carry less than half the normal course load. The loans can finance non-degree programs such as valuable career building certificate programs that demonstrate skills and knowledge for employers. The total deferment of up to 24 months stands out among the leading lenders.
The lack of variety in repayment term (only 10 years is available) is somewhat inflexible, and students cannot defer loan repayment if they return to school after the grace period ends. Students do have the option to pay more to shorten the loan repayment term, and they can defer when needed.
KHESLC has a relatively small group of serviced loans when compared to the large national servicing agencies. The reputation for user-friendly access online is good and the number and type of complaints are low.
The private student loan program offers two types of repayment terms. Students can select in-school repayment or post-school repayment. Repayment is an essential part of controlling the costs of education. Periods of nonpayment whether by grace periods or deferments add to the total costs of the loan. Interest accrues during deferments and forbearance. Once the deferment or forbearance ends, the lender capitalizes the unpaid interest and adds it to the overall debt.
In-school repayment has three levels. First, payment can be immediate, and students must begin making payments as soon as they receive the loan funds. Second, students can delay full payment by choosing interest only payments while in school. This option requires payment each month of school attendance including during the grace period. Students can delay all payments while still in school. Third, the full in-school deferment runs through graduation or the end of studies. Students do not pay interest while in school, and it accrues until the end of the deferment.
Private loan borrowers can use a six-month grace period after graduation to delay making payments. The grace period allows a period of adjustment as students develop employment or financial resources. Students begin payments after the grace period. If borrowers encounter financial difficulty, they can apply for economic hardship deferrals. If granted, they can use up to 24 months of economic hardship deferments.
About 94 percent of private student loans have co-signers. The co-signers creditworthiness is an essential part of qualifying for the private student loans. During repayment, the borrower may wish to release the cosigner. The private loan permits release of co-signers from further potential obligation for loan repayment. To qualify for cosigner release, borrowers must make 36 consecutive on-time payments. The loan agreement calls for co-signer release upon his or her death or disability. The loan will not be discharged in the event of the cosigner’s death or disability.
Forbearance policy is among the differences of the private loan from US federal student loans. Private student loans do not offer forbearance, and students cannot shape the terms of repayment through income-based repayment plans. Forbearance and income-based repayment are available to federal student loan borrowers.
The private loan program helps student pay faster by accepting higher than minimum payments through automatic payment systems. The system does not support autopay on a bi-weekly payment schedule. Students can pay more through autopay but must do so monthly. Students must file a specific form to designate overpayments to reduce the principal of the loan. When paying more than is due, the system automatically places the over payment towards the next regular payment.
Private student loans offer greater periods of deferment that similar loan programs on the market. The borrower can use up to 24 months of deferment over the life of the loan. Students can use deferrals for economic hardships. The flexibility afforded by the length of deferment helps borrowers navigate through financial difficulties.
Academic deferment is available for private loan borrowers that are not in repayment. Once in repayment, students cannot pause or defer payments by entering an academic program.
The time for repayment is a ten-year term and the program does not offer other repayment windows. Students can shorten the repayment period by paying more than required monthly. The minimum loan amount is $1,000. The program does not set a firm maximum amount. Students can use cosigners to increase the likelihood of acceptance and the amount they may borrow.
The loan program has favorable terms for borrowers. The period of deferment is about twice the length of typical student loans which offer one year of deferments. Borrowers do not have to pay late fees and there is no prepayment penalty. The Kentucky Higher Education Student Loan Corporation does not charge an origination fee for the private student loans.
The private loan program offers a ten-year repayment term at a fixed interest rate. Interest rates are fixed for the term of the loan. The program posts a range of rates; The low end of the range is for the most creditworthy applicants. The actual rate is determined by the income and credit score of the applicant and cosigner if any. The factors include credit history, indebtedness, and the overall financial situation of assets and liabilities.
Private loans are a great way to close the gap between other funding sources and paying cash, if your program is not covered by traditional financial aid, or you need help with living expenses so you can focus on school. Just remember to borrow responsibly, and above all, finish your degree program so you can pay the loans back with your new career.