Alternative education loans are non-federal loans offered by private lending institutions. Some families use alternative loans when additional resources are needed to meet educational costs not covered by family resources and other forms of financial aid. These loans are generally more expensive than the federal loan programs and should only be used when federal loan eligibility (Stafford and PLUS) has been exhausted. The following terms and conditions are generally common to most alternative loan programs and are provided to help students and families understand alternative loans. Students and families should always consult with the lender for the terms and conditions specific to a loan program they are considering.

The following information appears below:
General Alternative Loan Provisions
Repayment
Application Procedures
Summer School

General Alternative Loan Provisions:

Borrowers: The loan is in the student's name. However, for most loan programs, undergraduates will need a cosigner. Some loans have a cosigner release option after a certain number of on-time monthly payments, typically 24 to 48.

Eligibility Requirements: Applicant must be 18 years of age; a U.S. citizen or eligible non-citizen; enrolled at least half-time in a degree program; credit worthy or apply with a credit worthy cosigner.

Loan Amounts: The maximum amount students may borrow is the school's cost of attendance less other financial aid. Lenders usually have a minimum loan amount of $500 or $1,000.

Interest Rate: Alternative loans usually have variable interest rates which are based on an index such as LIBOR or PRIME plus an additional percentage depending on the applicant's and cosigner's credit score. For example, a loan program's interest rates may range from Prime plus 1% to Prime plus 5%. The highest credit score would receive Prime plus 1% and the lowest approved credit score would receive Prime plus 5%.

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Repayment Terms:

Payment periods typically range up to 15 or 20 years depending on the amount borrowed. Some loans allow a longer period. Repayment options generally include immediate repayment of principle and interest, interest-only payments during enrollment, or deferred principal and interest payments during enrollment.

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Application Procedures:

For most alternative loan programs, students must annually complete an application for each academic year. The loan application may be completed on-line at the lender's web site.

The first step is to choose an alternative loan which will meet the family's and student's needs. To assist students with researching and selecting a lender, Alfred provides a suggested alternative loan list. Students may choose any alternative loan they wish and are not obligated to use a loan from this list.

To view Alfred University's suggested alternative loan lenders at our ELM Select web page under the "Private Loans" tab, click here.

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Summer School:

Current students interested in alternative loans for summer school should visit the financial aid office for counseling and to explore summer school aid options.

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