...you borrow conservatively. Apply only for what you need. Please keep in mind that you may need to borrow each year you are in school to help meet the cost of education. Plan accordingly and keep loan debt manageable.
...you do your homework when shopping around for a lender and choose a lender who best suits your needs as a borrower.
...you use an Alternative Loan as a final resource after exploring all other sources of financial aid, including Stafford and PLUS Loans if applicable.
Alternative Loans are private educational loans that are available to students in need of additional assistance after all other types of funding have been exhausted. You, the student, will be the borrower of the Alternative Loan; however, you may need a credit-worthy individual to act as a co-signer.
How much am I eligible to borrow?Although some lenders limit the amount that you may borrow annually, the general rule of thumb is that you may borrow up to the cost of attendance less any other financial aid you may be receiving. For example, the cost of attendance is $15,000 and you are receiving $8,000 in other aid. You would be eligible to borrow up to $7,000 as long as your lender does not have an annual borrowing limit less than $7,000.
What is the interest rate?The interest rates on Alternative Loans vary from lender to lender and are generally higher than those of both Stafford and PLUS Loans.
When does repayment begin?Repayment terms and conditions also vary from lender to lender. Some lenders offer a delayed repayment option while the student is enrolled in school; however, interest on delayed repayment options begins to accrue immediately, so you should try to make payments on your Alternative Loan if possible.
How do I choose a lender?When choosing a lender, you should do your homework and choose a lender that best suits your needs as a borrower. You may want to consult the Pennsylvania Educational Lenders Association's web site for more information on Alternative Loans.
How do I apply for an Alternative Loan?In order to apply for an Alternative Loan go to Pennsylvania Educational Lenders Association's web site.
