Alternative/Private Loan Programs

Alternative or private loans are outside funds not part of the Federal Student Aid Program. Accordingly, it is not necessary to file a FAFSA or other federal forms in order to receive these loans. Many students and parents opt for these loans when they are looking for more flexible repayment options than those available with federal loans, such as postponing repayment until after a student graduates or placing the loan in the student’s name.

Though these are non-federal loans, most lenders will require SU Financial Aid Office to certify the student’s enrollment and eligibility. Accordingly, we will not certify a private loan which exceeds our estimate for the student’s educational expenses. Federal financial aid regulations also require SU to include private educational loans as part of a student’s financial aid package. As a result, a private loan may reduce the amount a student or parent could receive in other forms of financial aid, regardless if SU certified the loan or not. Conversely, the amount SU could certify for a private loan could be limited by the other aid the student is receiving.

Some things to keep in mind when considering a private loan:

• Borrower/Cosigner Responsibility: In borrowing a private loan, the student is often responsible for repayment; as opposed to the Parent PLUS Loan, where it is the parent’s responsibility to repay the loan. However, lenders of private loans will often require a parent or another party to cosign the loan for their student, making that individual responsible for repayment if the student defaults on the loan. Cosigning also means the loan will appear on the cosigner’s credit history in addition to the student’s.
  
• Interest Rate: The interest rates on private loans are typically based on the current prime/LIBOR rates and are variable. Often the lender will base the interest rate upon the credit score and history of the borrower or cosigner. In comparison, the interest rate for the Federal PLUS Loan is fixed at 7.9%.

Some lenders who offer alternative loans include:
Access Group
CampusDoor
Citibank
Key Bank
Sallie Mae
Wachovia
Wells Fargo
Others available upon request