Alternative Loan Information
Tips On Selecting and Applying For An Alternative Loan
If the amount of financial aid awarded to you is not enough to cover your educational expenses, you may wish to consider an alternative loan. Alternative loans offer interest rates that are lower than commercial loans and payments may be deferred while you’re in school. Although alternative loans are a convenient source of additional funding, it’s important to note that they are funded by for-profit loan companies and interest will accrue while you are in school. Therefore, we recommend that you first exhaust other possible resources (e.g. income from your job, parental assistance, money from savings, etc.) before you borrow an alternative loan. Students can choose from a variety of alternative loans. To help you select the best one for you, we have listed some important considerations below.
Considerations for Selecting an Alternative Loan
- The Borrower
For most of the alternative loans, the student is the borrower. However, if your parents would like to be the primary borrower of the loans, you may wish to consider the Parent Loan for Undergraduate Students (PLUS), the Parent Loan from College Avenue, or the Sallie Mae Parent Loan (for parents or other credit-worthy individuals).
- Interest Rate
A fixed rate means the interest remains the same for the life of the loan. A variable rate fluctuates based on the economy, and may or may not have a cap. If you’d like to know the current interest rate of a particular alternative loan, please contact the lender or check their website.
- Loan Fees
Some lenders charge a fee for processing your loan. If you plan to borrow a large amount, loan fees are an important consideration. For example, if you borrow $3,000 with a loan fee of 8%, the bank would keep $240 of your loan for processing.
- Enrollment Status
Some lenders require that you be enrolled at least half-time. Other lenders allow you to borrow their loan if you are less than half-time. Check the “Eligibility Requirements” on the lender website to determine the enrollment status requirements for each loan.
Most alternative lenders require you to be creditworthy or to have a creditworthy co-signer. Additionally, you may be eligible for a more reasonable interest rate when utilizing a creditworthy co-signer.
- Financial Aid Suspension
Some alternative loans are not available for approval or disbursement release if your federal financial aid eligibility was suspended because you did not meet the standards of satisfactory academic progress.
Alternative Loan Resources
A variety of alternative loan resources are available to students. Rasmussen College accepts funding from a wide variety of lenders and advises students to review as many lender resources as possible to compare options. Below is a historical listing of alternative lenders who have secured loans with Rasmussen students in the past 5 years for your reference.
- College Ave Student Loans
- Sallie Mae Smart Option Loan
- *SELF (MN residents only)