Private Alternative Education Loans
- For students in courses such as part-time Clinical courses that are below six credits or for whom the federal Direct Stafford Loan does not cover needed costs
- Always take the federal Direct Stafford Loan first
- The alternative loans are offered by private lenders not the federal government
- Eligibility may be driven by the applicant’s and co-applicant’s credit score
- Variable and fixed interest rates are available from most private lenders
- Parents who are considering a private alternative education loan often consider a HOME EQUITY LOAN or a Federal Direct PLUS Loan. There are several tradeoffs between these options. We find in over half the cases a private loan offers lower rates than a federal Direct PLUS Loan
- Like federal student loans, they are not dischargeable through bankruptcy.
- Ask the private lender if they offer unemployment deferments, income-based repayment, public service loan forgiveness or cancellation if the borrower dies or is severely disabled.
To select a private alternative education loan, it’s best to do your own research:
- Ask lenders for comparison charts
- Go online. Entering “private student loans” or “alternative student loans” on any search engine will yield quite a few sites.
- You may also want to read the information on “Private Education Loans” on www.finaid.org.
- HACC does not recommend any particular private lender nor do we track the benefits of one lender over another. A neutral company, SLA Analytics has a helpful website..
Students applying for a private alternative loan must complete the Private Loan Self Certification Form and submit it to the Financial Aid Office at the campus you attend.