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 is encouraged. For specific details, review each lender’s web page which may be accessed through the Alternative Loan Lender list below. 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. Any missing documents can be found on the student’s myMu Portal. Students must be enrolled at least half time (6 credit hours) to be eligible for an alternative loan. MU does not endorse any lender or their products. Each lender varies in regard to terms, interest rate, and repayment options; therefore, students are encouraged to research private loan companies prior to borrowing. As a borrower, you may choose any alternative loan lender you prefer whether or not listed below.
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.
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. The following chart will help you determine the maximum alternative loan amount you should request for the academic year.
|A. Expenses (full year)|
Tuition and Fees
Room (if applicable)
|B. Financial Aid (full year)|
Perkins & Stafford Loans
PLUS LoansTOTAL B:
|C. Alternative Loan Amount|
(“A” minus “B” equals “C”)
Considerations When Choosing a Private Loan
- What is the interest rate for this loan?
- Is the interest rate fixed or variable?
- Is there a cap on the interest rate?
- Are there any disbursement or repayment fees?
- Will the fees be subtracted before disbursement?
- Will the fees be included in any capitalization?
- Will funds disburse directly to the school, or will the check be sent to me directly?
- Is there a grace period?
- When does repayment begin?
- Is there any penalty for paying the loan off before the scheduled amount of time?
- What will be my monthly payment amount?
- What will the overall repayment amount be, including interest assuming full repayment period?
- Will I be able to afford this payment along with other loan payments?
- Are there any deferment or forbearance options for re-enrollment at another school?
- Are there loan forgiveness, deferment or forbearance options if I become unemployed or disabled?
- What are approval rates in general for the loan?
- What is the quality of customer service they provide
- What incentives you do you offer for repayment?
Applying for Alternative Student Loans
- Select a lender. Methodist University has provided an Alternative Loan Lender List below listed in alphabetical order. You may choose to borrow through any lender, including lenders not on this list. If you choose to borrow through a lender that is not on the Alternative Loan Lender list, contact the lender for complete details.
- 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.
- Students may check the status of the loan by contacting the lender.
Alternative Loan Lender List
MU does not provide a preferred lender list for alternative loans, instead as a courtesy listed below are private lenders (in alphabetical order) who continue to participate in the Private Education Loan Program. MU does not endorse any lender or their products. Each lender varies in regard to terms, interest rate, and repayment options; therefore, students are encouraged to research private loan companies prior to borrowing. As a borrower, you may choose any alternative loan lender you prefer whether or not listed below.
Now offering parent/other loans; see website for details.
No cosigner or credit score required**
Minimum GPA 3.0
See website for details and all requirements
Must be a U.S. citizen or permanent resident AND a legal resident of Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Massachusetts, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, Oregon, Texas, Virginia, West Virginia, or Wisconsin
**For qualified students: students that don’t qualify on their own may apply again with a co-signer.
* Does not require Satisfactory Academic Progress (SAP)
We encourage you to compare lender benefits by using the following lender comparison tools listed below in alphabetical order which illustrates a side-by-side comparison of specific loan rates and terms:
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 will 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 borrower may cancel or reduce a loan anytime before a loan has disbursed to Methodist University. If the loan has already been disbursed and credited to the student’s account in the Business Office, the borrower may cancel a loan within 30 days from the date it disbursed and credited to the student’s Business Office account. A student may reinstate a Federal Direct subsidized (sub) and unsubsidized (unsub) loan at any time prior to the end of the student’s current academic year enrollment. The Federal Parent PLUS for Parents/Graduate students and Alternative Loans MAY NOT be reinstated once reduced or cancelled. Instead, the borrower must reapply online. To reinstate, reduce, or cancel a loan, the borrower must complete the Loan Revision Form. Important Notice: Canceling any loan disbursement could result in a balance to be due on the student’s account in the Business Office which the student will be responsible for paying.
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 provided on Methodist University’s Alternative Loan Lender List, 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 lender. Methodist University has compiled a alternative loan lender list. Should Students choose a lender not provided on Methodist University’s Alternative Loan Lender List, check with that lender to ensure they offer private alternative loans.