USAA has a long standing history of serving the financial needs of the military and other service members, as well as their families. Currently, membership to join USAA is limited to the following groups: active, retired, of honorably discharged members of the U.S. military, midshipmen or cadets who are located in training academies within the United States, ROTC members, spouses of USAA members who have died, and in some cases private citizens (when they had a parent who holds or has previously held a USAA property or auto insurance with USAA).
While entry into this exclusive bank may be challenging, for those who are eligible, there are many benefits. These benefits include free nationwide use of ATMs, discounted interest rates of auto loans, student loans, and mortgage loans.
USAA employs these values in helping customers plan for each phase of their life and has various financial products, such as retirement, investment, banking, and insurance products, to help customers achieve their goals. USAA even has a tool called the Financial Readiness Score, that rates the financial well-being of an individual or a family or a scale of 1 to 100. This score takes into account the saving habits, spending habits, protection or insurance, and documentation of members.
USAA’s mission states that the values that were essential to the development of this initial agreement (honesty, integrity, loyalty, and service), still ring true in their banking vision today.
USAA was developed in 1922 as the result of an agreement made by twenty-five Army officers to insure each others' cars since they were unable to find insurers willing to guarantee them.
Furthermore, they offer free financial advice geared specially towards military families and other a number of other special banking products and discounts for members (i.e., travel insurance and FedEx discounts when shipping).
Information About USAA Student Loans
USAA currently has a special relationship with Wells Fargo Bank to offer some of the best student loans available, which enables members to receive member-only interest rates on private student loans. The current loan rates range from 3.40% to 8.60% APR for variable rate loans. Students may also opt for a fixed interest rate loan and can call USAA to obtain the current rates. A number of student loans are open available members and include:
Undergraduate Loans: are open to students who are pursuing a certificate or degree in a career training program, a junior college, or a four-year university or college.
Graduate Loans: are open to students who are pursuing a professional degree, law degree, MBA, or other graduate degrees.
Health Professional Loans: are loans that are only open to graduate students in eligible health programs
Consolidation Loans: provide a nice alternative to multiple payments each month. These loans allow students to consolidate student loans, so that they can make one loan payment per month instead of several. Students may benefit from a lower interest rate and/or may have the option of spreading their payments out over a longer term.
Benefits of USAA Student Loans
- Opportunity to receive a discounted, member-only rate on student loans through a USAA-Wells Fargo partnership (receive a 0.25% USAA membership discount)
- A discount of 0.25% for members who enroll in automatic payments
- Low interest rates on private student loans
- A six month grace period after graduation before loan repayment begins
- The ability to borrow up to 100% of education costs
- The ability to release cosigners from the loan after either 24 or 48 payments are made on time
- Flexible loan types that are available to both students and their parents
- Defer payments while the student is still attending school
- No application fee and no fees when loan begins
- No penalty is assessed for students who opt to pay their loan balance off early
Applying for a USAA Student Loan
Students who are interested in applying for a loan can find out quickly and with no hassle. Students may either call a toll free number or go to USAA’s website. Once on the USAA website, students can go to the student loan page and click the green get started button. The website will then indicate that USAA members are eligible for specific discounts and will transfer them to the Wells Fargo loan application page. At this page, students are required to complete a form which contains demographic information, such as income, school information, and work history.
In order to apply, USAA indicates that borrowers will need to have some information handy. This includes their current address and phone number, their social security and driver’s license information, information about their current employer, and contact information for a reference who can vouch for them.
At this time, students can opt to have a cosigner or not. Many undergraduate students will have to have a cosigner due to limited credit history or lack of income, though loans are available to those without one. Even those students who do have an established credit history may receive a lower interest rate, which could save them thousands of dollars, if they add a cosigner. Any adult who is at least 18 years of age or older and who meets the income, employment, citizenship, and credit history requirements can apply to be a cosigner. The cosigner will have to provide their information as well on the application form. Cosigners will have to apply after you have submitted your application. Student applicants are required to give their cosigner an application number, which they will need in order to complete the cosigner application.
After the application has been submitted, Wells Fargo may need additional information in order to determine eligibility. They will also need you (and a cosigner if applicable) to sign a form. They may ask for additional documentation from your school to verify that you are attending or plan to attend that school. Lastly, Wells Fargo will contact you once a decision has been made. At that time, students can decide whether to accept or decline the loan terms if they were deemed eligible.
Students will also want to ensure that they complete the FAFSA application prior to applying for a private student loan. The FAFSA will tell students whether they are eligible for any federal funding, which they may want to maximize first, before resorting to private loans. Federal loans often have better interest rates as well as more flexibility during the repayment process.