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Alternative loans are private student loans through a lending institution that are not part of the federal government programs. Alternative loans are more expensive than federal government guaranteed loans and should only be used when all other options have been exhausted. Research all possibilities for scholarships, grants, work-study, and federal loan programs before borrowing from an alternative loan program. If you determine you need an alternative loan, use the comparison chart below to research the preferred lenders. Choose the loan that best suits your needs and remember to borrow only what you need!
See Application Instructions below
The Direct PLUS Loan is part of the federal government student loan program and is included on your Award Letter. Other Alternative Loans may be used instead of teh Direct PLUS Loan. For information on PLUS loans, application instructions and Links: PLUS
WHAT SHOULD I LOOK FOR IN AN ALTERNATIVE LOAN?
- Interest Rates - Are the rates competitive with other alternative loans or are they too high?
- Fees - Fees make the loan more expensive. Compare fees with other alternative loans. If one loan program has higher fees, does it have a lower interest rate?
- Repayment Incentives - Does the alternative loan reward borrowers that make payments on time? For example, after 48 consecutive monthly on-time payments, will you receive an interest rate reduction?
- Loan Limits - Does the loan have an annual or aggregate limit? Can you afford to borrow within these limits? It's a good idea to borrow from the same lender each year, so make sure the loan can cover your costs throughout your entire education.
- Lender for Federal Loans - Does the lender of the alternative loan also participate in the Federal Direct Lending Program? It may be easier to borrow your federal Direct and alternative loans through the same lender. Some lenders can even combine the billing for these loans so you will only received one monthly billing statement.
- Pre-approval - Do you need to know quickly if you qualify? Does the lender offer loan pre-approval over the phone or internet?
- Cosigner Requirement - Does the alternative loan require you to have a cosigner? Sometimes cosigners reduce the costs of the loan, but if you can't find a cosigner, you'll need to find an alternative loan you may borrow on your own.
- Interest Capitalization - If you choose not to pay the interest on your loan while you are in school, the interest may be capitalized, (added to your principal balance.) When is the interest capitalized? Annually? At repayment? If the interest is capitalized annually, the loan is more expensive than if it were capitalized only once at repayment.
- Repayment - Does repayment begin immediately or after you graduate or leave school? Make payments whenever you can afford to, but if you can't make regular payments while you're in school, you'll need to find a loan that doesn't require immediate repayment.
- Repayment Period - How long is the repayment period in which you repay the loan? If your educational costs require you to borrow large amounts, you may need a longer time to repay the loans.
ALTERNATIVE LOAN APPLICATION
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Determine $ amount needed
The maximum alternative loan amount, for a school year, is calculated by:
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Student’s Total Cost of Attendance
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Total Financial Aid
(see Award Letter)
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Max Loan eligibility $
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NOTE: Fees may be deducted (see Comparison Chart info below)
If you would like a Worksheet to help you calculate $ amount needed: Worksheet
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Use the Alternative Loan Guide Comparison Chart to compare the various recommended programs.(link below)
If you need additional information or clarification on a program, contact the lender via the information provided on the chart.
Application information and links are provided on the chart.
ALTERNATIVE LOAN COMPARISON CHART
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