What is an alternative (private) student loan?
An alternative student loan, or private educational loan, is a credit-based supplemental loan made by private lenders to help “fill the gap” between the Cost of Attendance (COA) and what the Financial Aid Office awards. However, we recommend you borrow only what you actually need. Because alternative student loans are not subsidized by the federal government, they may have a higher interest rate than federal loans and is generally a variable rate. Students may be required to apply with a co-borrower.
Although this is a “private” loan, lenders require the Financial Aid Office to certify the loan so that the student does not borrow more than their cost of attendance (COA). The Financial Aid Office can help you determine your eligibility for an alternative student loan.
How much can I borrow?
Students should apply for federal student aid before applying for an alternative student loan.
Graduate and Professional Students
We recommend that graduate/professional students that are enrolled at least half-time consider borrowing the Graduate PLUS Loan before an alternative student loan.
Will my credit be considered?
Yes, students and co-borrowers (if required) must meet the lender’s established minimum credit criteria. Lenders may consider a number of factors when determining loan eligibility such as credit-worthiness, debt-to-income ratio, and students and co-borrowers can obtain a copy of their credit report from any of these major credit reporting agencies:
How to Evaluate and Choose a Lender
If you make good choices about lenders right from the start, the whole process will go more smoothly, from application to that final payment. You'll want to compare the following aspects of lender services when deciding which lender to choose:
- Interest rates, fees and terms: How is your interest rate calculated? Can I get a better interest rate by applying with a co-signer? Are there any additional fees for this loan? What are the terms of the loan?
- Customer service: Can you reach a live operator quickly to check on the status of your loan during hours convenient for you?
- Loan application processes: Can you apply online? Is instant loan approval offered?
- Repaying your loan: How soon do I have to start repaying the loan after graduation or dropping below half-time status? Does the lender offer deferment or forbearance options while I’m in school and after graduation?
- Early payment: Are there any penalties for paying off the loan early?
- Repayment plans: What repayment plans and options are available?
- Repayment incentives: What incentives does the lender offer for borrowers who pay on time or make loan payments electronically?
Undergraduate students
Check with your lender to see if you may qualify for a lower interest rate by applying with a co-borrower.
International students
Most lenders require international students to apply with a co-borrower who is a U.S. citizen
or permanent resident with a valid social security number.
Lenders
Students seeking an alternative student loan must initiate the process by contacting a lender of their choice. You must notify the Financial Aid Office that you have applied for an alternative student loan and the lender that you selected. The lender should submit a school certification request to the school. Once the university processes the certification request, your lender will notify you of the total amount certified, the amount and date of each disbursement. Your lender will also provide Truth-in-Lending information disclosing your loan's terms, conditions, as well as your rights and responsibilities. You will be required to complete a self-certification form and return it to your lender before funds are released to the university. Funds will be sent to the university to pay tuition and fees first. Any remaining funds will be sent to you via electronic deposit or by mail.
(Apply using School Code 004508-00)
We encourage you to utilize the information in the “How to Evaluate and Choose a Lender” section above when selecting your lender. Listed below are links to lenders used by students at the university over the past academic year. Please note that you are not limited to the lenders listed below. Please refer to your lender for specific eligibility requirements and terms.
*Chase will no longer offer private student loans after 6/30/2012, except to their existing clients who have active Chase accounts.
Additional Information
For more information and a lender comparison chart, go to http://www.finaid.org/loans/privatestudentloans.phtml.