PRIVATE ALTERNATIVE LOAN INFORMATION What is a Private Alternative Loan? A Private Alternative Student Loan is a loan that a student can take should he/she need financial assistance for school beyond what is available from federal aid. These loans are intended to be a supplement to federal, state, and institutional aid awarded as a result of the completion of a FAFSA. When should I apply for a Private Alternative Loan? You are first encouraged to complete the FAFSA and utilize those funding sources prior to obtaining an alternative student loan. If this funding is insufficient, you may then want to explore Private Alternative Loan options. Who is eligible? Any student is eligible to apply; this includes undergraduate, graduate, and credential students. The private lender will determine the student’s eligibility based on credit history. The school will certify the loan for student’s loan based upon his/her Cost of Attendance for the loan period. Students should know that Private Alternative Loans are certified for the school year; loans are not based on the calendar year. Check with your lender or the school for additional eligibility requirements. How do I apply? Should you decide to borrow an alternative loan, we encourage you to research and become familiar with the loan options including interest rates, terms and conditions, and other specifics pertaining to the loan. Most commercial lenders participate in Private Alternative Loan programs. You may wish to contact your current bank or financial institution where you or your parents maintain a checking or saving account to inquire if the lender participates in the Alternative Loan programs. Many lenders allow borrowers to apply online through their websites. Once the loan is approved by the lender, the application will be sent to the school for certification. When are Private Alternative Loan funds disbursed? These funds are disbursed at the beginning of each term or, if certified after the term begins, after the loan process has been completed. The check is sent to the school and you will be notified when it is available for pick-up.
What questions should I ask my lender? In making a decision on a Private Alternative Loan, it is important that you research and understand all of the borrower benefits, loan fees, repayment options, etc. Below is a list of questions that may assist you in determining which loan will best suit your educational borrowing needs. What is the interest rate? Is the interest rate fixed or variable? When does the variable rate change? Is there a cap on interest? What fees are charged? When and how do I pay the fees? What is the total cost of the loan? When does repayment begin? Is there a grace period? Can payments be deferred? Do I have to pay the loan while in school? Are there any borrower benefits? How do I qualify for these benefits? Are there minimum enrollment requirements? Are there satisfactory academic progress requirements? What are the credit criteria for approval? Do I need a co-signer?