An alternative or private student loan is a credit based supplemental educational college student loan provided by a private lender to help cover the gap between your cost of college attendance and what the Financial Aid Office can assist you with. Because alternative student loans will not be subsidized by the federal government, they will generally have a higher interest rate than a federal college student loan will. College students will probably be required to apply with a co-borrower if no credit history has been established on them.

Although this is a private loan (alternative student loan), lenders will require the Financial Aid Office to certify the college student loan so that the college student does not borrow more than their actual cost of attendance. The Financial Aid Office can also help you determine your eligibility for an alternative student loan.

Will your credit be considered?

Yes it will. Students as well as co-borrowers, if required, must meet the financial institutions established minimum credit criteria. Financial institutions will consider a number of factors when they are determining student loan eligibility such as credit-worthiness, and a debt-to-income ratio. College students and co-borrowers may obtain a copy of their credit report from any of these major credit reporting agencies:

• Equifax or 1-800-685-1111
• Experian or 1-888-397-3742
• TransUnion or 1-800-888-4213

How much are you allowed to borrow?

College students are always encouraged to apply for federal college student aid before applying for any alternative student loans. Graduate and professional college students should also check their eligibility for the Graduate PLUS College Student Loan before applying for an alternative student loan.

Generally, college students can borrow up to their cost of attendance minus any other financial aid that has been received. However, it is recommended you borrow only what is needed.

How to Choose a Lender

If you have made a good choice about your lender right from the start, the whole process will probably go very smoothly, from application to that final payment. You do want to compare the following aspects of financial institutions when deciding which lender to go with:

• Interest rates, fees and terms: How is my interest rate calculated? Are there any additional fees with this loan? What are the terms of the loan?
• Customer service: Can I reach a live operator to check on the status of my loan during hours convenient for me?
• Loan application processes: Can I apply online? Is there an instant loan approval?
• Repaying your loan: How soon do I have to start repaying the student loan after graduation or dropping below half-time status? Will the lender offer deferment or forbearance options while I am in school and after graduation?
• Early payment: Will there be any penalties for paying off my loan early?
• Repayment plans: What repayment plans and options will they offer me?
• Repayment incentives: What incentives will the lender offer for borrowers who pay on time or make student loan payments electronically?

Students who are seeking an alternative student loan must initiate the process by contacting a lender or financial institution on your own. You should notify the Financial Aid Office that you have applied for an alternative student loan and which lender you have selected. The lender must submit a school certification request to the school. Once this has been processed the certification request, you will be contacted informing you of the total amount certified as well as the amount and date of each disbursement. Funds should be sent to the school and must be used to pay tuition and any fees first. Any remaining funds will be released to you.

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