- Alternative education loans are private loan programs offered through banks for the purpose of supplementing a student's financial aid package.
- They are not federally endorsed or guaranteed, but they must be certified by the Financial Aid Office to ensure that the loan does not exceed your cost of attendance budget minus all other financial aid.
- Most alternative loan funds are disbursed in two installments and applied directly to the student's account.
We encourage you to explore all of your Federal Direct Student Loan and Federal Direct Parent Loan options first.
Alternative Loans are based on credit worthiness and in most cases require a credit worthy co-signor if the student is the applicant. Alternative Loans interest rates, fees charged, repayment terms and repayment benefits vary between lenders.
WHERE CAN I FIND A LOAN?
HESC, New York State government website, will help you learn more about Alternative Loan
providers. Remember to call lenders, research their websites and ask questions. Do
your homework so you can make an informed decision.
Tips for Selecting an Alternative Loan Provider
As you may know, there are different student loan providers from which to choose. The Financial Aid Office encourages you to carefully evaluate and research the terms offered by the lenders to ensure the best possible term for your personal circumstances. Treat the importance of these loans the same as you would for any loan (car, mortgage, etc.) you were to consider. Call the lenders, research their websites and ask questions.
Consider the following when choosing a lender:
- Origination fees
- Repayment fees
- Interest rate - Adjustable vs. fixed
Borrower based benefits
Be aware that loan terms can change yearly and repayment benefits are dependent upon specific borrower behaviors. Therefore, in order to retain borrower behavior based benefits, such as reductions for paying by auto debit and/or reductions for specified number of on time payments, you would need to specifically follow the loan terms in order to receive the benefit.
- Auto debit interest rate reduction at repayment
- Interest rate reductions with a certain number of on-time payments
- Principal reductions at origination and/or at repayment late payment forgiveness
- Federal default fee paid by lender/guarantee agency
- Ability to regain benefits if you lose them due to a missed payment or lack of funds
When selecting a lender, it is important to consider the lender's level of customer service.
- 24 hr Toll free 1-800 number
- Selling loan at repayment
- Third party servicing
- Online account access and email access to account reps
- Limited number of borrower complaints
- Electronic on-line application process and instant approval
- Flexible repayment options combined billing for federal and private loans