Private Student Loans

SunTrust understands how overwhelming paying for college can be.

Before taking out a private student loan, or if you have one already, it's important to clearly understand all aspects of the loan and its repayment requirements.

With the information below, let us help you understand the basics. And if you're still confused, don't be afraid to call us.

Private vs. Federal Student Loans: Do you know the difference?

Private Student Loans
Offered by private lenders like SunTrust, private student loans can help bridge the gap between the cost of a college education and the financial aid received from federal student loans, scholarships and grants. SunTrust recommends students compare all aid alternatives prior to applying for private student loans.

Federal Student Loans
Federal Student Loans are funded by the federal government and offered to students and parents.

  • Compare federal and private student loans.
  • Direct Loans are low-interest loans made to students for the cost of education, minus any financial aid. Eligibility for these loans is not based on credit history.
  • PLUS Loans are made by the federal government and allow parents and graduate students to borrow money up to the cost of education, minus any financial aid. Financial need is not a requirement, but credit history is used to determine eligibility.

Helpful information

Before you apply for a private student loan
Anyone considering a private student loan should understand all aspects of the loan, the application process and its repayment requirements. Many of the following questions may be under consideration —

What is credit history and why is it important?
As part of the private student loan application process, a lender will review the credit history of the student and cosigner (if applicable). Familiarity with an individual's credit report will help a consumer understand their personal credit history.

  • A credit report is a detailed list of an individual's credit history, including any loans and credit cards, payment history and credit ("FICO") score; lenders use this information when evaluating a request for credit, including requests for a private student loan
  • To help manage debt, as well as protect against identity theft, it is recommended that all consumers read their credit report at least once a year
  • Consumers are entitled to a free credit report every 12 months from three nationwide consumer credit bureaus which can be requested at or 877.FACTACT (877.322.8228)

Will a cosigner be needed?

  • Many students need a creditworthy cosigner to qualify for a private student loan
  • Some lenders, including SunTrust, offer an option to release a cosigner from the loan after certain criteria have been met; this criteria is determined by the lender. For more details, click here.

Do I have to make payments during school?

  • Most lenders, including SunTrust, allow private student loans to be deferred while students are enrolled at least half-time or more
  • The length of deferment can often be capped — this criteria is determined by the lender
  • Some students choose to make payments while in school to help save on the total loan cost; click here for a description of the benefits of paying interest while in school

What kind of interest rate is available on a private student loan?

  • Interest rates are based on credit history and vary by lender and loan program
  • Many private student loans offer a choice between a variable or fixed interest rate — this is true of the loans SunTrust offers
  • Variable interest rates change monthly or quarterly which means monthly payments can increase or decrease as the rate changes
  • Fixed interest rate loans have a set interest rate for the life of the loan

What, if any, fees apply to a private student loan?

  • Since fees can significantly add to the total cost of a private student loan — it's important for borrowers to understand what fees are charged by the lender
  • Private student loans may have origination fees based on credit history and/or repayment fees that will be added to the loan balance once the loan enters repayment (SunTrust does not charge origination or repayment fees on its private student loans)
  • As with many types of loans, not just private student loans, late fees are charged if a payment is made after the due date

Do private student loans offer borrowers any special features or benefits?

Navigating the private student loan process can be difficult. SunTrust is here to help.

What's the Loan Process for a Private Student Loan?
To begin, lenders will require the student and cosigner, if applicable, to complete a loan application. After the application is submitted, the lender will review a credit report for all applicants. A cosigner is not always required, but most students, especially those without a substantial credit history, may need a creditworthy cosigner to qualify. Learn more about SunTrust private student loan options.

Upon Approval for a Private Student Loan
Upon passing the initial credit review, there are multiple steps before funds are disbursed for a private student loan and the loan process can vary by lender. With SunTrust, here's a general overview of what to expect —

  • Loan options are presented online - SunTrust offers multiple options including choice of interest rate type (fixed or variable), repayment plans, including a choice to defer while in school and repayment terms
  • Choose whether or not to refinance existing private student loans - within the application process, approved applicants are given an option to refinance existing private student loans1 into a new private student loan; more about this option.
  • Loan documentation - applicants must submit required loan documentation (this may include verification of income, proof of identification, payoff documentation for any loans being refinanced, etc.)
  • Loan Packet - after all required documentation has been received and approved a Loan Packet will be sent with documents outlining the terms of the loan based on the preliminary loan amount before school certification. The Loan Packet includes the Credit Agreement, Approval Disclosure, and Applicant Self-Certification form.
  • School Certification - certification of the loan by the school is required; this certification is requested by SunTrust and ensures that the student is enrolled at least half time, that the loan amount is appropriate for the cost of attendance at the school, and specifies when the loan will be disbursed
  • Final Disclosure - after school certification is received, final loan terms will be outlined in a Final Disclosure which allows applicants the opportunity to cancel or rescind the loan during a 3-day right of rescission period
  • Loan Disbursement
    • Funds for the upcoming semester/academic period - amounts and timing of when a SunTrust private student loan is disbursed is dictated by the school; funds are sent to the school, applied to the student's account and any overage of funds above/beyond what is owed to the school, is handled between the school and student.
    • Payoffs for loans being refinanced - If a portion of the new loan is being used to refinance existing private student1 loans, payoffs2 are sent to the Servicer; more about this option

What are a private student loan borrower's responsibilities?
The promissory note or credit agreement explains all borrower and cosigner obligations. Among them are the following:

  • Private student loan borrowers, and their cosigners, if applicable, are responsible for paying back the loan, even if the student borrower doesn't complete coursework, graduate from college or cannot find a job after graduating
  • Private student loan borrowers and their cosigners must notify the lender or servicer if:
    • There is a change in name, address, phone number or Social Security number
    • The student drops below half-time enrollment status
    • The student graduates, withdraws or transfers to another school
    • Scheduled loan payments cannot be made as scheduled
    • Loan repayment needs to be delayed or put on hold with a deferment
    • The student or cosigner becomes an active service member within the military
  • In addition, borrowers and cosigners should open and read all mail related to any student loan

How do private student loan borrowers know when payments are due, how much is owed, where to send payments, etc.?

How long do I have to repay a private student loan?

  • Repayment terms are usually set by the lender and range from 5 to 25 years
  • Some lenders offer you the option to choose the repayment term
  • In general, a longer repayment term may allow for a lower monthly payment; however, the overall cost will be higher due to the interest being charged

Are deferment options available?

  • Deferment options vary by lender and loan program
  • If the loan offers the ability to defer payments while in school, interest will accrue during any period of deferment and the loan balance will be higher when repayment starts
  • If interest payments can be afforded while in school and/or during the grace period, it is wise to do so; this will reduce the total loan cost

How do I make payments on a private student loan?

  • Many lenders partner with loan servicers to manage private student loans after the loan proceeds have been disbursed. Servicers process payments and deferment requests, and maintain all records and files
  • Shortly before a first loan payment is due, borrowers should receive information from the loan servicer with monthly payment information (amount due, date due and where to send the payment)
  • It is very important to inform the lender and servicer of any changes in address, phone number and/or enrollment status

What happens if I miss a payment?

  • If a payment is missed, additional charges such as late fees may be charged
  • Missing a payment will cause a loan to be delinquent.
  • Missing multiple payments for specified period of time will cause a loan to be in default (more information on this can be found in the promissory note or credit agreement)

Other loan repayment resources —

No matter what stage you're at in planning for a college education, you'll need to determine how much you need to save, estimate the cost of college and analyze financing needs for each year of college. Calculators can help determine how much to save or borrow for college and then how much extra is needed.

Other popular resources —

If you are having trouble paying your loans, there are options.

Work on a solution with our servicer, AES.
American Education Services (AES) is the servicer for SunTrust private student loans which means AES manages repayment relief options, deferment requests and inquiries from current SunTrust private student loan holders. When borrowers need payment relief, AES is a great resource — they work with borrowers all day long to help find a solution, and they can help you, too.

Options that could help

  • Don't wait until student loan payments are several months behind.
    Contact AES as soon as possible. Explore helpful information at the AES website,, or call them at 800.233.0557
  • Apply for a deferment or forbearance
    Popular reasons why many students need a deferment or forbearance include going back to school, financial hardship, military service, etc.
  • Consider an alternative repayment plan
    You may qualify for an alternative repayment plan which allows borrowers to pay interest only for periods of time (such as 12-24 months). Interest continues to accrue during this time and the principal loan balance will increase, but an alternative repayment plan may help avoid further difficulties.
  • Student Loan forgiveness
    In the event of an unfortunate circumstance involving death or total and permanent disability of the student, loan forgiveness is an option. Loan forgiveness, however, does not apply in the event of death or total and permanent disability of the cosigner

SunTrust private student loan borrowers can apply to release their cosigner when certain requirements are met. This benefit is available to student borrowers who have the following SunTrust private student loans: Academic Answer, TERI, Custom Choice Loan®, Graduate Business Loan, Private Student Loan Consolidation, Union Federal® and/or AAA Advantage Loan.

The Cosigner Release process is simple!

  • After the required monthly principal and interest payments have been made on-time (see below for details), call American Education Services to request a Cosigner Release Application
  • If the student borrower is eligible to apply, an application and instructions will be mailed
  • Return the completed and signed application along with requested documentation
  • Applicant will be notified by SunTrust within 30 calendar days upon receipt of all required documents

FAQs - Releasing a Cosigner from a SunTrust Private Student Loan

When can a Cosigner Release Application be requested for a SunTrust private student loan(s)?
The student borrower may request a Cosigner Release Application only after meeting the following requirements:

  • Payment of a specific number of monthly principal and interest payments on-time (received within 10 calendar days* after the payment due date)**
  • The student borrower is a U.S. Citizen or Permanent Resident Alien
  • The student borrower is enrolled for automatic deduction of monthly payments from a bank account and has had at least one payment on the loan transferred electronically from the bank account***

    * Payments for TERI loans (only) are defined as on-time when they are received no later than the 15th day after the payment due date.

    ** The SunTrust Union Federal Private Student Loan Program and the AAA Advantage Loan, funded by SunTrust, require 36 on-time payments; The Custom Choice Loan and Graduate Business School Loan require not 36 or 48 on-time payments, as set forth in your Credit Agreement; Private Student Loan Consolidation requires 48 on-time payments.

    *** Requirement ONLY for SunTrust Custom Choice, Graduate Business, Union Federal, AAA Advantage and Private Consolidation loans, as set forth in your Credit Agreement.

If the student borrower has made all of the required on-time payments and is eligible to apply to have a cosigner released, what happens next?
Call American Education Services (AES) at 800.233.0557, Monday through Friday, 7:30 AM to 9:00 PM (ET) to request a Cosigner Release Application.

Is the Cosigner Release Application available on SunTrust's website?
No. You must call AES at 800.233.0557, Monday through Friday, 7:30 AM to 9:00 PM (ET) to request one be mailed to the student borrower.

How is the decision made to release a cosigner from a SunTrust private student loan?
To qualify to have a cosigner released from the loan(s), the student borrower must meet current income and credit standards. This includes, but not limited to:

  • Satisfactory credit history
  • No significant debt in comparison to student borrower's income
  • Have never defaulted on a federal or private student loan

Is a cosigner's income and credit reviewed in the Cosigner Release process?
No, only the student borrower's income and credit history are evaluated.

How long will it take to reach a decision on the Cosigner Release Application?
Once a completed Cosigner Release Application and acceptable income verification documents are received, a decision is made within 30 calendar days.

How will student borrower and cosigner be notified of the decision?
A letter outlining the decision will be sent via USPS mail. The student borrower is notified upon approval or denial of the cosigner release request. Additionally, the cosigner is notified if the Cosigner Release Application is approved.

Can a student borrower complete one Cosigner Release Application for all SunTrust loan programs?
Only one application is needed if the student borrower has a combination of Custom Choice, Graduate Business, Private Consolidation, Union Federal and AAA Advantage loans. Only one application is needed if the student borrower has a combination of Academic Answer and TERI loans.

Can the cosigner be released if the student borrower dies or becomes permanently disabled?
Yes, if appropriate documentation is received by AES to document the student borrower's death or permanent disability, the cosigner will no longer be required to repay the loan.

If the cosigner is released from liability, will there be any changes made to the credit bureau report for the borrower or cosigner?
There will be no changes made to the borrower's credit bureau report upon the release of a cosigner (the loan will continue being reported to all the major credit bureaus on an ongoing basis). Regarding the cosigner, there will be changes to the credit report — the loan balance will be reported to the credit bureaus with a $0 balance, and the loan trade line with its historical reporting will remain in place.

1 Private student loans that can be refinanced with a new SunTrust private student loan are private student loans and private consolidation loans that the student applicant used for, or to refinance loans used for, postsecondary Qualified Higher Education Expenses not currently in a past due status. Loans that cannot be refinanced into this loan are (1) private student loans for which the student applicant is not the primary borrower, (2) Federal student loans and (3) student loans made by an educational institution. Learn more about the In-School Refinance Option.

2 You should continue making required payments on the loan(s) you choose to refinance until they are paid off. Time will elapse between when this option is requested and when the loans are actually paid off. If the payoff amount(s) sent to your servicer(s) do not cover the entire balance owed on the existing loan(s), the outstanding balance(s) will remain your responsibility.

Paying for college can be a challenge. SunTrust can help navigate the options.

  • Money Management

    Before you look into paying for your college expenses, it's important to know how much money you'll need. Our money management resources, tools, and budgeting tips can help.

  • Financial Aid Tools

    Use our college tuition guide and step-by-step guide to paying for college for planning advice on how to avoid getting too over-burdened with debt before you've earned a degree.

  • Scholarships & Grants

    Before you get a loan, we encourage you to try getting scholarships and grants first. Our list of online resources can help. You can also register for the SunTrust Off to College Scholarship Sweepstakes (see Official Rules for details).