Private Alternative Loans: an option for students

Getting a college education can be expensive, and many students face the challenge each year of how they are going to finance their college degree.  If students have already exhausted all of their federal aid and their parents are unable to assist  them in their educational costs, Private Alternative Loans are an option that students could further research.  Before seeking out a Private Alternative Loan, students will want to make sure they are aware of the following information.

Private Alternative Loans:

•Are educational loans from private lenders for students still needing to cover educational costs not paid for with their federal aid.

•Are more expensive than federal government loans.

•Should only be used when all other options have been exhausted (scholarships, grants, work-study, federal loans, etc.)

•Usually have variable interest rates that can fluctuate monthly or quarterly.

•Require the borrower to be creditworthy.  If you are not creditworthy, a co-signer may be required.

•Are not federally guaranteed.

•May not have the same deferment, cancellation and consolidation benefits available to borrowers of federal loans

The above information is taken from http://www.uni.edu/finaid/alt_loan_info.shtml.

If a student decides a Private Alternative Loan is for them, they will want to check out the University of Northern Iowa Office of Student Financial Aid website at www.uni.edu/finaid. 

Once at this Website, students will be able to access a list of different available lenders as well as a list of requirements you must fill before borrowing a Private Alternative Loan. 

It’s important to note that if students are a first time borrower of a Private Alternative Loan, they must make an appointment with a peer counselor in the Office of Student Financial Aid before their loan will be certified.  Also, anytime they borrow a Private Alternative Loan they must complete a Private Alternative Loan Education Packet.  This packet can be found on the Office of Student Financial Aid website. 

If students would like to learn more about Private Alternative Loans, please contact the Office of Student Financial Aid by phone at 319-273-2700 or by email at fin-aid@uni.edu.


 

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