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Transcript: How Much of a Private Loan Should I Borrow?

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This video will show you 

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step-by-step how to calculate 

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the amount of a 

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Private Loan to borrow.

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Before we can get started, 

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we need to grab 

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some information from 

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the Student Aid Summary. 

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Let's log in to eLion at 

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elion.psu.edu

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Open the "Financial" menu on 

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the left side of the page and

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click on the link "Student Aid Summary." 

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Select the academic year 

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and click "Continue." 

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Then click on "View Aid" to

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show the Student Aid Summary.

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This is an example of 

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a Student Aid Summary that

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I made just for this presentation.

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Yours may not look exactly the same 

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but it will be similar. 

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There are two things we need to write down 

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from this page, the

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Estimated Total Cost of Attendance 

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and Total Aid.

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Your student's financial aid 

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will be listed at the top 

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of their Student Aid Summary 

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under the heading, Types of Aid. 

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If you are applying for a Private Loan 

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for the fall and spring semesters, 

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write down the "Total Aid" 

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under the Total column. 

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Otherwise, write down 

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"Total Aid" under the fall 

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or spring column. 

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If you request a loan 

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for both the 

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fall and spring semesters, 

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you will receive 

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two equal disbursements. 

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The first disbursement 

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will be credited on 

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the fall tuition bill 

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and the second disbursement 

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will be credited on 

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the spring tuition bill. 

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The lower half of 

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the Student Aid Summary 

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lists your student's billable 

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and non-billable expenses. 

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Write down the 

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"Estimated Total Cost of Attendance" 

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under the fall, spring, or total column. 

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For the purpose of 

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this demonstration, 

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I'm going to use $13,400 

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as the Total Aid 

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and $32,200 for the 

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Estimated Total Cost of Attendance.

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Now we need to open up 

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the Private Loan Worksheet - 

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there's a link on 

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the same page as this video. 

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You'll need Adobe Reader 

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to open the worksheet. 

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If you don't have it, 

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you can download it for free at

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get.adobe.com/reader

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The first thing 

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we want to figure out is 

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our Maximum Loan Eligibility.

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The Maximum Loan Eligibility 

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is simply the maximum amount 

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of a Private Loan 

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that you are eligible to borrow. 

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The important thing 

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to remember though 

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is that you may not actually need to 

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borrow the maximum amount.  

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Ok, let's open the worksheet 

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and figure out what our 

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Maximum Loan Eligibility is. 

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From the Student Aid Summary, 

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we wrote down that the 

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Estimated Total Cost of Attendance 

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was $32,200. 

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Under Part One, 

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I'm going to write 

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in $32,200 

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in this first line 

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while you write in your number. 

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And let's do the same 

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for the Total Aid. 

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Then, subtract the Total Aid from 

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the Estimated Total Cost of Attendance. 

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For me the resulting figure is $18,800. 

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This is my Maximum Loan Eligibility. 

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Part 2 of the Private Loan Worksheet 

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may or may not be relevant to you, 

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depending on whether you plan to 

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contribute any out-of-pocket funds. 

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I'm going to carry over the 

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$18,800 from Part 1 

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and write in the $2,000 

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I'm going to pay out-of-pocket.

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To get the Amount to Borrow, 

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subtract your

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out-of-pocket contribution

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from your Maximum Loan Eligibility. 

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I get $16,800. 

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This is the amount I need to borrow. 

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To quickly recap, 

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we arrived at 

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the Amount to Borrow figure 

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by subtracting the Total Aid 

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from the Estimated Cost of Attendance 

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to determine our 

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Maximum Loan Eligibility. 

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Then we subtracted any 

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personal contributions from 

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the Maximum Loan Eligibility 

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to get this final figure, which is

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the Amount Needed to Borrow. 

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This final number is 

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what you'll want to request to borrow

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from a private loan lender.

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For more information 

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about Private Loans, 

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please visit the "Types of Aid" section 

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of our website at

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studentaid.psu.edu

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You'll find there 

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information on how to plan for, 

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decide on, 

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and apply for a private loan;

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questions to ask Private Lenders;

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and a table that compares

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private loans with the 

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Federal Direct Parent PLUS Loan.

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To estimate monthly payments and

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the total repayment amount 

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for a private loan,

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use the Loan Calculator

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at finaid.org/calculators

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