Student Loan Certification: What Is It and How Does It Work?
Every year, students around the country complete student loan applications in order to pay for tuition and other related expenses for college.
Before a student loan can pay to a student's account, a process called certification must be completed.
Certification is basically a borrower protection put in place to make sure that correct loan amounts are being distributed to students. There are two different types of student loan certifications out there: self-certification and school certification.
Self-certification is a required part of any private student loan application in which the borrower must list cost of attendance and all other financial aid awarded to confirm eligibility for a loan. It is used to raise borrower awareness about financial aid and prevent borrowers from overborrowing. An applicant cannot borrow more than total cost of attendance minus any financial aid awarded. Here is an example of what a self-certification can look like:
School certification is a process completed at the school's financial aid office for all student loans, including federal and private. School certification confirms the borrower's eligibility for particular loans after reviewing the student's registration status, associated cost of attendance, and other financial aid eligibility. A loan request may be reduced or canceled depending on the registration status (full time, half time, less than half time, etc.) A school will certify different loans considering different data. Here are detailed examples:
As grade level is accounted for when awarding a Stafford loan, here is a list of maximum eligibility for each year of school, and lifetime eligibility. Note that as students advance in grade level, their federal loan eligibility increases:
When is certification completed? A self-certification for a private student loan is completed during the early stages of the application. A school certification is completed by the school's financial aid office after student loans are awarded and accepted by the student. A school certification may be completed very quickly, but it can take a long time for all loan certifications to be processed because of the high volume of students that apply for funding. Follow up with your school's financial aid office to get an estimate on when your loan will be certified.
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