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Alternative Loans
Bridge the gap between the cost of your education and the financial assistance you receive.
Alternative loans, also known as private education loans, are offered by private lenders and are not federally funded. These loans may not be included in a federal consolidation.
Financial Aid Code of Conduct Self-Certification Form
About Alternative Loans
- Eligibility for private education loans depends on your credit score.
- They usually have variable interest rates based on Prime or LIBOR and rely on a credit review to calculate the initial rate of interest.
- Typically the student is the borrower and often a co-borrower is required to have a good credit score to receive a favorable interest rate.
- Interest accrues after disbursement of the loan.
It is recommended that you exhaust your eligibility for federal student loans before resorting to private student loans. Alternative loans tend to cost more than the education loans offered by the federal government. Federal educational loans offer fixed interest rates that are often lower than the variable rates offered by most private educational loans. Federal educational loans also tend to offer better repayment and forgiveness options.
Additional Information
- All alternative education loans are credit-worthy loans, and the lender may suggest or require a co-signer/co-borrower. Rates are based on credit and co-borrowers are encouraged to receive better rates and fees.
- Credit checks are valid for 180 days prior to fund disbursements.
- Most lenders allow a maximum loan amount of cost of attendance minus other financial aid, as certified by the school.
- Many lenders may have a co-borrower release option after loans have been satisfactorily repaid for a period of time.
- Lenders may offer deferments and grace periods for student borrowers.
- There are no pre-payment penalties for these loans.
- Be sure to refer to the lender for most recent requirements, terms, features, and benefits, as they are subject to change at any time.
Selecting a Co-Borrower
The ideal co-borrower must:
- Be willing to help you out in a long-term financial commitment
- Have good or excellent credit, reflected in a strong credit score/history (roughly 675 or higher)
- Demonstrate financial stability
Co-Borrower Tips
- Parents and other relatives are the most common co-borrowers.
- If your parents are willing to help out, they might consider the Direct Parent PLUS Loan as an alternative.
- Remember to shop around before committing to a particular private student loan.
Suggested Private Alternative Loan Lenders
USJ provides a list of suggested private alternative loan lenders for your consideration on ELM Select. Explore this external website for:
- Easy access to lenders’ websites
- The ability to compare loan programs side by side
- Links to other helpful websites, such as a loan payment calculator to help you estimate your loan payments
- Information on rates and fees for private alternative loans from lenders who have worked with our students in the past.
Note: Choosing an alternative loan lender is ultimately your decision. Should you decide to use a specific loan or lender outside of those suggested, please contact us with all of the details so we may process your loan efficiently.