Can I use my loan proceeds for postsecondary educational expense?

No, you can’t. Private education loans for postsecondary educational expenses cannot be offered through Prosper because some of the rules in the federal law aren’t compatible with our platform. Specifically, the law says that, once the lender approves a loan application, the borrower must have at least 30 days to accept or reject the offer. This rule is incompatible with Prosper’s platform, which requires borrowers to commit to obtaining and repaying a loan in the amount specified if their loan is funded by the end of the listing period.

A federal law called the Higher Education Opportunity Act includes special requirements designed to protect students who take out “private education loans” to finance the cost of college, graduate school, vocational school, or other post-high-school education. A “private education loan” is any loan where the borrower specifically states that all or part of the proceeds will be used for “postsecondary educational expenses,” which include tuition and fees, books, supplies, miscellaneous personal expenses, and room and board.