| Alternative
Student Financing Options
What are alternative student loans? Alternative student loans are offered by banks or lending institutions to help students and parents bridge the gap between the cost of education and the amount of financial aid received. These are alternative supplemental loans that are NOT guaranteed by the federal government. Terms and conditions can vary according to specific lender guidelines. Who can apply for an alternative student loan? Students can apply for alternative student loans as a supplement to traditional federal and state sources of financial aid. Methodist University encourages all students to apply first for federal and state financial aid. Alternative loans may provide the resources for educational expenses not covered by received federal and state aid. How much can a person borrow? The actual amount varies according to each student's individual financial circumstance. Other variables include the cost of attendance, financial aid resources and loan limits imposed by the lender. Are there strict requirements to obtain an alternative student loan? Unlike federally guaranteed student loans, lending institutions that offer alternative student loans may impose certain requirements. In most cases a student must have a good credit history, a low debt-to-income ratio, and a cosigner may be required. Since a credit check is likely, not everyone is approved for an alternative loan. Considerations When Choosing a Private Loan
Borrow Only What You Need Remember, you are agreeing to repay your loan regardless of whether you complete your education, are satisfied with your education or are able to find a job. If a student loan is your first borrowing experience, consider this responsibility seriously—your ability to borrow in the future depends on it. Estimate Your Loan Amount Your alternative loan amount plus financial aid should not exceed your cost of attendance. The following worksheet will help you determine the maximum alternative loan amount you should request for the academic year. A. Expenses (full year) B. Financial Aid (full year) C. Alternative Loan Amount $____________ Applying for Alternative Student Loans Step 1: Undergraduate/Graduate Students may access Methodist University's preferred lender list* Step 2: Once the Undergraduate/Graduate Student has selected a lender, simply click on the "Apply Now" option located to the right side of the lender’s detailed description to begin the loan application. Step 3: The Lender will notify
the Undergraduate/Graduate Student of additional documentation needed
or approval of the Alternative loan. The lender will then send a
certification request to the Office of Financial Aid for authorization
of Alternative loan. Understanding the Difference between PLUS Loans and Alternative Student Loans
Don't miss the repayment difference Taking a look at the two programs, the PLUS Loan may appear to be the more desirable option for families, except for the repayment issue. Many families may want to delay repayment while the student is in school, and often view alternative loans as their best option. Since lenders offer an in-school deferment option for Graduate/Professional students and a forbearance for parents to delay payment, however, this repayment option may help make the PLUS Loan the better choice. |
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The Office of Financial Aid
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