LelaCHOICE Common Questions

Undergraduate and Graduate Student Loan

Why should I choose a LelaCHOICE loan over other similar loans by other lenders in the market?

Lela is the Louisiana’s non-profit source for college financing over the last 40 years. Lela is a different type of organization. Lela is part of the Louisiana Public Facilities Authority (LPFA), which was set up as a public trust. Our mission is to provide you with access to information and best tools to plan an pay for college. We put your interests first and strive to improve our services and programs. We offer better terms and rates to provide programs with the best savings.

Should I apply for a LelaCHOICE student education Loan instead of a federal student loan?

No. Before students and families consider a private student loan, we strongly encourage them to understand and take advantage of all sources of student financial aid, at the state and federal level, which includes federal loans for students The LelaCHOICE student education Loan is designed to supplement — not replace — other sources to fill funding gaps for students and parents. Students and parents should work with financial aid professionals at their respective colleges and universities to explore and exhaust all sources of student financial aid before seeking a LelaCHOICE student supplemental loan.

Am I eligible for a LelaCHOICE student Loan?

To be eligible for this supplemental non-federal student loan program, you must:

Be of majority age pursuant to applicable law at the time of application or be an emancipated minor. An applicant not of majority age may apply with an eligible cosigner.
Not have defaulted on any private or government student loan.
Be a Louisiana resident attending any nonprofit, Title IV eligible, degree-granting, accredited college or university in Louisiana or a Louisiana resident attending an eligible out of state nonprofit, Title IV eligible, degree-granting , accredited college or university.
- Note: Nonprofit schools of nursing located in Louisiana must be approved by the Louisiana Board of Nursing.
Be accepted, enrolled or attending on at least a half-time basis, as defined by the school, in an eligible education program.
Be a citizen or permanent resident of the United States. Cosigners must be citizens or permanent residents of the United States and must reside in the United States. Military addresses are considered U.S. addresses if designated as an APO or FPO.

What are the credit and underwriting requirements to qualify for a LelaCHOICE student Loan?

The LelaCHOICE student Loan is for borrowers and one or more creditworthy cosigners.

Note: Applicants who are creditworthy (meet the underwriting and credit criteria) are not required to provide cosigners.

To qualify, you or your cosigners must have:

Monthly payments for approved credit (mortgages, rent, car loans, credit cards and other forms of credit, including the loan for which the student has submitted an application) that do not exceed 40% of gross monthly income (if a mortgage or rent is not included, debt-to-income ratio cannot exceed 25%). All student loan debt will be treated as though it is in repayment.
Continuous employment over the last two years. (This requirement may be waived for retirees, disabled persons or those receiving a verified income.)
A FICO score of at least 670. (The FICO score used is the TransUnion FICO Score 4, which is based on data from TransUnion and may be different from other credit scores. FICO is a registered trademark of the Fair Isaac Corporation.)
No more than two accounts reporting 30-day delinquencies and no delinquencies of 60 days or more during the previous two years.
No charge-offs, repossessions, collection accounts, judgments, foreclosures, garnishments by credit providers or tax liens.
No previous bankruptcies.
Not defaulted on any private or government student loan.

Note: For joint cosigned LelaCHOICE student Loans, at least one cosigner must meet all credit underwriting criteria with the exception of the debt-to-income ratio.

The list of criteria above may not be exhaustive. The Louisiana Education Loan Authority (Lela) may require you or your cosigners to meet additional criteria in order to qualify for a loan. Lela reserves the right to change the list of criteria in any way from time to time.

If I apply with a cosigner, can they be removed as a cosigner in the future?

You can release any cosigners from payment obligations if both requirements are met below:

After the first 24 consecutive monthly principal and interest payments are received on time.
If you meet the underwriting and credit criteria at the time the cosigner release is requested.

How much can I borrow with a LelaCHOICE student Loan?

You may borrow up to the cost of attendance minus other aid each year. Your school must certify that the amount you are requesting does not exceed this amount.

Can I reduce the interest rate I pay?

You can earn a 0.25% interest rate reduction by signing up to have principal and interest payments automatically withdrawn. The 0.25% interest rate reduction will apply once payments begin to be automatically deducted. The reduction will remain in effect as long as automatic payments continue without interruption during the repayment period. The 0.25% interest rate reduction will not lower the monthly payment amount but will instead reduce the interest amount that accrues. The interest rate reduction will be suspended during approved assistance or if automatic payments are rejected due to insufficient funds.

What happens to interest that is not paid?

Interest that is not paid during deferments or under other circumstances is not capitalized (or added to the principal balance of the loan) as with other student loans with other lenders. LelaCHOICE never capitalizes interest, which means you do not pay interest on interest, resulting in you paying less back.

What is interest capitalization and why Lela does not capitalize interest? What happens to interest that is not paid?

Capitalization is the addition of unpaid interest of the principal balance of your loan. The principal balance of a loan increases when payments are postponed during periods of deferment or forbearance and unpaid interest is capitalized. As a result, more interest may accrue over the life of the loan, the monthly payment amount may be higher, or more payments may be required. LelaCHOICE never capitalizes interest at any point through repayment, thus saving borrowers funds. Borrowers never pay interest on interest with LelaCHOICE.

What happens if I experience unexpected financial issues and am unable to make my payment?

You may qualify for assistance based on your situation. Please call us as soon as possible if you experience issues, so we can help you avoid delinquency.

What happens to my LelaCHOICE student Loan if I die or become permanently disabled?

In the unfortunate event of a borrower’s death or qualifying total and permanent disability, Louisiana Education Loan Authority (Lela) will forgive the loan and not require cosigners or the borrower’s estate to satisfy the loan obligation. A tax professional or the IRS can provide additional information about possible tax consequences of loan forgiveness.

If my cosigner dies or becomes permanently disabled, will you require me to find a new cosigner?

No; in the event of a cosigner’s death or qualifying total and permanent disability, you will not be required to find a new cosigner for an existing loan. In addition, if a cosigner suffers a qualifying total and permanent disability, Lela will release the cosigner from his or her obligation.

Does Lela service the LelaCHOICE Loan program?

Lela, a non-profit organization, is the owner of the loans and administrator of the program. Customer service for all loans will be provided by Aspire Servicing Center, a wholly owned subsidiary of Iowa Student Loan on behalf of Lela. Iowa Student loan is a non-profit entity.

Graduate No-Cosigner Student Loan

Am I eligible for a LelaCHOICE No-Cosigner Loan for Graduates? What is the eligibility criteria?

A FICO score of at least 670 (The FICO score used is the TransUnion FICO Score 4, which is based on data from TransUnion and may be different from other credit scores. FICO is a registered trademark of the Fair Isaac Corporation.)
No more than two accounts reporting 30-day delinquencies and no delinquencies of 60 days or more during the previous two years.
No charge-offs, repossessions, collection accounts, judgments, foreclosures, garnishments by credit providers or tax liens.
No previous bankruptcies.
Not defaulted on any private or government student loan.
Be a Louisiana resident attending any nonprofit, Title IV eligible, degree-granting, and/or non-degree granting accredited college or university OR be a non-Louisiana resident attending any nonprofit, Title IV eligible, degree-granting, and/or non-degree granting accredited Louisiana college or university.
Be accepted, enrolled or attending on at least a half-time basis, as defined by the school, in an eligible graduate program.