Certified and Uncertified Student Loans

Learn the differences between certified private student loans vs. uncertified student loans

Because federal law requires that all funds used for Federal Direct Student Loans are put to their intended purpose, your school will certify the loan before disbursement. This means the school verifies the amount being borrowed is needed to cover education related expenses.


Most lenders and schools electronically communicate through a central clearinghouse, the National Student Loan Clearinghouse. This is a secure database to which qualified lenders and schools have access. Using this database, lenders can verify that you're enrolled and that the loan for which you've applied for does not exceed the total cost of attendance at that institution, less other financial aid you've received, and that the money will be used for qualified educational reasons. Each school keeps the database updated with every student's enrollment status; therefore, any changes to a student's enrollment, for example, a graduation or transfer, would be communicated to the Clearinghouse database. This change would then be communicated back to the lender.


In cases of manually certified student loans, lenders and schools exchange information on forms. Certification can take up to a couple of weeks depending on the volume that a school is experiencing. To ensure that information is current, you should make sure that:

  • Your contact information is always up to date
  • You don't wait to register for classes until the last minute. If you do, you run the risk that the lender will assume you've left school, and it could slow down the necessary paperwork.

With certified student loans, the lending institution forwards the funds not to you, the borrower, but to the school's business office, which applies the money to your account. Often, there is a little extra left over after tuition and room and board, and that difference is turned over to the student to apply to fees, books and supplies. With uncertified private student loans, you are able to use the loan money towards such expenses at any time.


Most private student loan lenders are no longer offering uncertified private student loans. For those that are, if you are considering using one to finance your education, you should be careful not to over borrow. With uncertified private student loans, the school does not need to approve the amount you are borrowing, and you receive the money directly. So, it becomes the student's responsibility to use that money to pay the tuition bill that is due the school. Then, they are able to use any remaining money toward other education related expenses. We recommend the student be very responsible in making sure the funds get to the school on time, as well as using any remaining funds wisely.

Learn more about our affordable Citizens Bank Student Loan™

To learn more about what expenses private student loans cover or to answer other student loan questions, we have what you need. Also, you can get all of the helpful information you need about our affordable school certified Citizens Bank Student Loan™ If you still have questions, call a student loan specialist at 1-888-411-0266, and we'll help walk you through the process.

Additional student loan and college planning resources

What are Federal Loans, and How Do You Get Them?
Using Private Loans to Fill the Financial Gap
What Are Subsidized and Unsubsidized Loans?
What is the Difference Between Stafford and Perkins Student Loans?