Lake Superior State University
Lake Superior State University
 
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Financial Aid Office

Alternative Loans

Alternative loans are not Federal loans. All students may be eligible for some type of Federal aid. Federal student loans with fixed interest rates of 4.66% (2014-2015) are available to students at all income levels. LSSU recommends that students borrow their maximum eligibility in Federal loans before applying for alternative loans because Federal loans generally have better terms, conditions and borrower benefits. Please complete a FAFSA (Free Application for Federal Student Aid) in order to utilize all of your potential federal aid eligibility before considering an alternative loan.

Another Federal loan option is the Parent PLUS loan for dependent students. This loan is available to parents at a 7.21% (2014-2015) fixed interest rate. The maximum PLUS loan amount is the cost of attendance minus any other financial aid.

Alternative loans are private, credit-based education loans.  Students can borrow up to their COA (Cost of Attendance) less any other aid they receive.  It is strongly encouraged that students complete the FAFSA to utilize their maximum federal aid eligibility first.  The maximum amount that you could borrow is listed as the “Parent PLUS or Alternative Loan” option on your Official Offer of Award, assuming that you will utilize your federal loans first.  We recommend that you use the Loan/Cost Estimator Tool to determine the actual amount that may be needed. Borrowing can be costly and we encourage students to exhaust all other options before applying for an alternative loan.

Consider some of these questions when researching alternative loans:

  1. What is the interest rate? Fixed? Variable?
  2. When do I have to start paying back the loan? And for how many years?
  3. Are there any loan fees?
  4. What are the co-signer requirements?
  5. Can I borrow even if I’m not a full-time student?
  6. What are the borrower benefits?
  7. Can the loan cover a past due balance?

Comparing Lenders

For your convenience, we have provided a list for you to compare and contrast different lenders.  ELM Select is a third party site that provides a neutral comprehensive list of private education loan lenders that LSSU students have borrowed from within the past three years, listed in random order.  LSSU does not endorse, recommend, or promote any of the listed lenders. You are not obligated to borrow only from the lenders listed. LSSU will process alternative loans from lenders who are not listed, but remember that each lender has certain loan eligibility requirements that if not met by the student, may not allow us to process the loan request.

Loan Periods

When completing an application for an alternative loan, the lender will ask that you select the loan period most applicable for the semester you wish to borrow. Select the loan period that most closely matches one of the loan periods indicated below. Do not be concerned if you cannot select an exact match.

LSSU's loan periods are:
Fall Only: August – December
Fall/Spring: August – May
Spring Only: January – May
Summer Only: May-Aug (use the entire summer semester period even if you are only attending a 6-week session)

I applied and have been approved. What happens next?

Once you have submitted your application to the lender and completed any additional steps, the lender will send your loan request to the school.  We review your loan request to make sure it fits within your cost of attendance budget.  If the amount you requested is more than what your budget will allow, we will reduce your loan to an amount that will fit within your budget.  The loan request is processed by our school and sent back to the lender.  The lender will then send the borrower a final loan disclosure, giving you a three day cancellation period.  Most lenders will send the loan funds to LSSU electronically.  The funds are applied directly to your account.  Any excess amount remaining after the funds have been applied will be refunded to you.  The total processing time from the time you apply for a loan to the time the funds are sent to the school can be anywhere from 2-4 weeks

Sample forms that lenders may ask you to complete during the application process:

Loan Processing Deadlines

Due to the processing time, loan requests cannot be honored during the last two weeks of the semester. Please submit any alternative loan requests to the Financial Aid Office prior to the last two weeks of the semester.

Disclosures:

  • LSSU strongly encourages students to maximize all of their federal aid eligibility before requesting private education loans.
  • LSSU is not affiliated with any private student loan lenders.
  • LSSU provides a list of private student loan lenders (through a third party) without prejudice for the purpose to assist students and does not endorse, promote or recommend any one lender over another.
  • The listed lenders are those who LSSU students have borrowed from within the past 3 years. (With the exception of three lenders whose information is not available on ELM Select. Those lenders are: H.P.C. Credit Union, Northland Area Federal Credit Union and Pentagon Federal Credit Union.)
  • Lenders do not pay a fee to be included on this list.
  • Students are not obligated to borrow only from the lenders that are listed.
  • The maximum amount that a student can borrow is listed as the “Parent PLUS or Alternative Loan” option on their Official Offer of Award, assuming that they will utilize their federal student loans first.

Helpful tips:

  • Borrow only what you need! Borrowing can be costly so check out the Loan/Cost Estimator Tool to estimate how much is really needed.
  • Do your research! Look at each lender thoroughly to determine which loan will best suit your needs.
  • Apply with more than one lender. This helps you determine which lender has the most favorable interest rate.  If you apply for more than one, make sure you do so in a short period of time (such as one week) in order to prevent several hits to your (and/or your co-signer’s) credit score.

The following links contain helpful tips regarding private student loans.  The information was published by WellsFargo. However, we are not indicating a preference for or recommending WellsFargo loans in any way.  It is simply our opinion that the information would be useful to borrowers.

 

 

 

 

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