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Paying For School

Additional Borrowing Options

Additional borrowing options

Private lenders offer alternative loans. The federal government does not offer these loans. Learn more about private alternative education loans.

Would a private alternative education loan be right for me?

A private alternative education loan may be right for you if:

  • You are below six credits. This can occur if you are taking part-time courses, such as clinical courses.
  • The federal Direct Stafford Loan does not cover needed costs. Always take the federal Direct Stafford Loan first.

How do private lenders determine eligibility?

Lenders may use the applicant's and co-applicant's credit score to determine eligibility.

What are the interest rates?

Most private lenders offer variable and fixed interest rates.

Should my parents take a home equity loan or a Federal Direct PLUS Loan?

Your parents can consider a private alternative education loan. Many parents often choose a home equity loan or a Federal Direct PLUS Loan.

There are several tradeoffs between these options. A private loan often offers lower rates than a federal Direct PLUS Loan. This occurs in over half the cases.

  • Private loans are not dischargeable through bankruptcy.
  • Ask the private lender if they offer unemployment deferments, income-based repayment, public service loan forgiveness or cancellation. These apply if the borrower dies or is severely disabled.

How can I research private alternative education loans?

  • Ask lenders for comparison charts.
  • Search online using keywords such as "private student loans" or "alternative student loans."
  • Visit www.finaid.org. Read the information on "Private Education Loans."
  • Visit SLA Analytics.

HACC does not recommend any particular private lender. We do not track the benefits of one lender over another.

What do I do if I am applying for a private alternative loan?

If you are applying for a private alternative loan, you must: