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 loans are credit based supplemental loans not guaranteed by the federal government. Terms and conditions vary for each lender. Credit checks are performed therefore if a borrower does not have enough established credit, a cosigner may be required. For specific details, review each lender’s information through the Fast Choice comparison tool. As with any loan, you are agreeing to repay your loan regardless of whether you complete your education, are satisfied with your education or are unable to find a job. A student must apply for the alternative loan and complete all required documentation prior to the end of the student’s current academic year enrollment. For information on missing documents contact your lender. Students must be enrolled at least half time (6 credit hours) to be eligible for an alternative loan. Fast Choice provides a tool for you to compare private lenders who continue to participate in the Private Education Loan Program. MU does not endorse any lender or their products. Each lender varies in regarding terms, interest rate, Satisfactory Academic Progress (SAP) requirements and repayment options; therefore, students are encouraged to research private loan lenders prior to borrowing. As a borrower, you may choose any alternative loan lender you prefer whether they are listed on Fast Choice.

If you are in a Certificate or Residency License Program (undergrad/grad) you will need to check with the lender to see if you are eligible to apply for one of their loans.

Borrowing Limit

The actual amount varies according to each student’s individual financial circumstance, the cost of attendance, financial aid resources, and loan limits imposed by the lender. Your alternative loan amount plus financial aid should not exceed your cost of attendance.

Considerations When Choosing a Private Loan

If a student loan is your first borrowing experience, consider this responsibility seriously-your ability to borrow in the future depends on it. Alternative loans may have disadvantages when compared with federal education loans. We encourage you to first exhaust all federal aid and loan eligibility, to include Federal Direct Subsidized and Federal Direct Unsubsidized loans prior to borrowing an alternative loan.

  1. What is the interest rate for this loan?
  2. Is the interest rate fixed or variable?
  3. Is there a cap on the interest rate?
  4. Are there any disbursement or repayment fees?
  5. Will the fees be subtracted before disbursement?
  6. Will the fees be included in any capitalization?
  7. Will funds disburse directly to the school, or will the check be sent to me directly?
  8. Is there a grace period?
  9. When does repayment begin?
  10.  Is there any penalty for paying the loan off before the scheduled amount of time?
  11.  What will be my monthly payment amount?
  12.  What will the overall repayment amount be, including interest assuming full repayment period?
  13.  Will I be able to afford this payment along with other loan payments?
  14.  Are there any deferment or forbearance options for re-enrollment at another school?
  15.  Are there loan forgiveness, deferment, or forbearance options if I become unemployed or disabled?
  16.  What are approval rates in general for the loan?
  17.  What is the quality of the lender’s customer service?
  18.  What incentives you do you offer for repayment?

Applying for Alternative Student Loans

  1. Select a lender. You may choose to borrow through any lender, including lenders not listed on Fast Choice. If you choose to borrow through a lender that is not listed contact the lender for complete details.
  2. Apply online through the selected lender. The Lender will notify the 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.
  3. Students may check the status of the loan by contacting the lender.

If you are not making Satisfactory Academic Progress (SAP), you can filter the lenders to find ones that do not require SAP.

FASTChoice

Follow the FASTChoice link to view Alternative Loan lenders.

Self-Certification

Federal regulations now require the completion of a Private Education Loan Applicant Self-Certification form for all private education loans. Student borrowers are required to obtain the form and the information needed to complete it, sign, and submit it to their lender. Some lenders will prompt you to complete this form as part of your online application process. If so, you do not need to complete a duplicate. The private loan application and disbursement process cannot be completed until the signed Private Education Loan Applicant Self-Certification form has been received by the lender.

Loan Cancellation/Reinstatement

A student or parent/other borrower may cancel or reduce an alternative loan any time before a loan has disbursed to Methodist University Student Financial Services. To reduce, or cancel a loan, the borrower must complete the Loan Revision Form and return it to the Office of Financial Aid.

Important Notice: Canceling any loan disbursement could result in a balance or larger balance due on the student’s account which the student will be responsible for paying.

Loan Disclosure

Methodist University (MU) is prohibited from selecting a lender or recommending a specific lender for students as specified through the Student Loan Sunshine Act (see below). Should students choose a lender not listed on Fast Choice, check with that lender to ensure they offer an alternative loan for undergraduate or graduate students. To ensure students and their families continue receiving sound and impartial advice from the Office of Financial Aid personnel, and to avoid the potential for, or appearance of, conflicts of interest regarding student loans, grants and scholarships, the staff in the Office of Financial Aid at Methodist University, shall abide by the Ethical Principles and Code of Conduct set forth by the National Association of Student Financial Aid Administrators (NASFAA).

Student Loan Sunshine Act

The Student Loan Sunshine Act was created to ensure that students have access to all lenders. Methodist University abides by all provisions of the Student Loan Sunshine Act and supports student’s freedom to choose any alternative loan lender. Should students choose a lender not listed on Fast Choice, check with that lender to ensure they offer alternative loans.