A I D Alternative Loans
lternative loans are available to students Loans to Consider
A who are not eligible for federal loans or who need
assistance beyond their federal loan eligibility. These
loans are made privately through banks and other financial
Alternative student loans should only be considered after first
applying for federal student aid, using the Free Application for
Federal Student Aid (FAFSA). Note that alternative student
institutions and are subject to their terms. loans require a credit check. Students should contact the
Although these loans are obtained through private lender directly, and allow four to eight weeks for the autho-
lenders, they must be certified by the school and within the rization process—plan accordingly. Terms and conditions are
F I N A N C I A L
student’s cost of attendance (budget). subject to change. Contact the lender for the most current in-
Alternative student loans should only be considered after formation.
an honest and careful review of your budget and debt. The lenders listed on the next page offer advantageous
Especially because this debt is in addition to your federal rates to CU-Boulder students. Other lenders are available. If
loan debt, it is in your best interest to borrow the least the listed financial institutions are unable to meet your
amount possible. Alternative student loans differ from needs, or if you simply want to review other options, see a fi-
federal student loans in several ways. nancial aid counselor.
1. There is no cap on interest rates. If interest rates in
general increase during the in-school, grace, or
repayment period, your alternative loan interest rate will
also increase. Annual percentage rate (APR)—The relative cost of
financing the loan (including fees and interest) on a
2. The lender will check on your credit and perhaps deny
yearly basis reflected as a percentage rate. The lower the
the loan or require that you have a co-signer with good
APR, the lower the true cost of credit.
Capitalization—Occurs when accrued interest is added to a
3. Alternative loans cannot be consolidated with federal loans,
loan’s principal balance. Lenders may capitalize interest
so you will have an extra payment to make each month in
quarterly, annually, or once at repayment. The loan
addition to the payment on one of more federal loans. With
becomes more expensive when interest is capitalized
some lenders, single-payment arrangements can be made.
Before borrowing any loan, estimate the monthly payment
Fees—Be aware of all fees and how they add to the total
amount and total cost of borrowing, remembering that both
cost of the loan. There are different types of fees. Fees
will change as interest rates in general change.
may have a greater impact than interest rates on the total
cost of a loan.
Choosing an Alternative Loan Loans may have a combination of fees:
O F F I C E
Three factors will likely affect your choice of an alternative • Origination fee—a flat percentage taken out of the loan,
loan lender: usually up front. The amount is subtracted from the loan
1. Costs—consisting of the interest rate and loan fees. Loans check. It can be considered a fee to administer the loan.
with lower fees often have higher interest rates, just as loans • Repayment fee—a percentage of the loan added to the
with lower interest rates often have higher fees. principal amount when repayment begins.
2. Service—talk with prospective lenders. Ask specific • Guarantee fee—a percentage of the loan added to the prin-
questions and expect good answers. Whether you are in cipal as default insurance. It is typically 1 percent and by
school, in your grace period, and in repayment, you law cannot exceed 3 percent.
should expect prompt, attentive, knowledgeable service
from your lender. Interest rate—A percentage of the loan that the bank
3. Repayment alternatives—some lenders have more charges you to use its money.
flexible options than others, or at least an option that Prime rate—The prime rate is the interest rate charged by
better fits your ability to repay. Remember that the banks to their most credit-worthy customers (usually the
longer you take to repay, the greater your total cost of most prominent and stable business customers).
borrowing will be. LIBOR (London Interbank Offered Rate) rate—Rate of
interest that major international banks in London charge
each other for borrowing.
A I D
Bank Enrollment Interest Rate Fees Repayment Other
Citibank Undergraduate Prime + 0%. None. Twelve years; • $18,000 annual income needed to apply
(CitiAssist) or graduate. six-month without cosigner.
800-745-5473 Enrolled in at grace period. • Cosigner release option.
www.studentloan.com least one class. • Loan can include university bill balance
from up to one year prior.
• Foreign students with a U.S. citizen cosigner.
• Study abroad okay.
F I N A N C I A L
• Graduate school and business college
• No Reasonable Academic Progress policy.
Wells Fargo Undergraduate Prime + 0% to None. Twelve years; • Reasonable Academic Progress.
Collegiate Loan or graduate in prime + 6%, six-month • Creditworthy or with creditworthy cosigner.
800-658-3567 eligible program, based on the grace period. • U.S. citizen or national or permanent resident.
www.wellsfargo.com enrolled at least credit of the • Creditworthy cosigner required for permanent
half time. borrower and/or resident.
cosigner. • Cosigner release option.
• $80,000 aggregate limit.
Current prime rates can be found at www.nafcunet.org/latest/rates.html.
For More Information U.S. Dept. of Education
Office of Financial Aid 800-433-3243 General Info/FAFSA
The financial aid office is in Regent 175. 800-848-0979 Direct Loan Servicer
9:00 a.m.-5:00 p.m. (fall/spring) 800-557-7392 Direct Loan Consolidation-
9:00 a.m.-4:30 p.m. (summer) FAFSA: www.fafsa.ed.gov
Internet: National Student Loan Data System:
Home Page: www.colorado.edu/finaid
303-492-5091 Office of Financial Aid
303-492-7349 Student Employment
O F F I C E
The University of Colorado does not
Write: discriminate on the basis of race, color,
University of Colorado at Boulder national origin, sex, age, disability, creed,
Office of Financial Aid religion, sexual orientation, or veteran
556 UCB status in admission to, and treatment and
Boulder, CO 80309-0556 employment in, its educational programs
Title IV Institution Code: 001370 and activities.