Alternative Private Education Loans are offered by banks or lending institutions to help bridge the gap between the cost of education and the amount of financial aid received. These are private loans that are not guaranteed by the federal government. If you choose to pursue a private alternative loan, you will submit your loan application directly to the lender and not King’s College.
Alternative Private loans can vary widely in their terms and conditions (such as interest rates, repayment terms and fees). Therefore, the Office of Financial Aid cannot provide you with information about comparative pricing of private loans nor about the likelihood of your being approved with or without a cosigner.
As application and credit review requirements vary, our advice is to apply early if you choose one of these loans as part of your financing plan.
The following are general characteristics of private educational loans:
- The borrower must be credit-worthy or have a credit-worthy co-signer.
- Students can apply for the loan; however, they will be required to have a co-signer.
- Most private educational loans have a co-signer release option.
- Since a credit check is likely, not everyone is approved for an Alternative Private Education Loan.
- Interest rates can be fixed or variable and based on the credit rating of the borrower/co-signer and the U.S. Treasury rate or the LIBOR rate (London based rate).
- Your interest rate is determined when you apply for the loan and a credit check is complete,
- There are no origination fees.
- You do not begin repayment until six months after the student graduates or withdraws from school.
Tip: Before applying for any alternative private loan, be sure to get free copies of your credit reports at www.annualcreditreport.com and correct any errors that may be listed.
HISTORICAL LENDING LIST
Borrowers may choose any participating lender when borrowing the alternative private student loans. To assist students who would like guidance in selecting a lender, we have developed a list of commonly used lenders. Your specific needs are unique, and no lender is perfect for every student, so we encourage you to compare these and other lenders and choose those whose repayment, services and benefits meet your needs.
To best support the selection process, King’s College has chosen to use a display platform called ELMSelect, which is not a lender and does not promote any lender.
Please visit ELMSelect.com for a comprehensive, three-year list of lenders commonly used by our students and families. Additionally, not all lenders choose to participate with ELMSelect. It is important to note that:
- The list is NOT ranked in any way.
- We do not have preferred arrangements with any of the lenders listed on ELMSelect.
- The Office of Financial Aid receives no benefit for listing these lenders.
- We cannot legally recommend a lender to you.
- Under federal law, you have the right to borrow through the lender of your choice regardless of whether the lender appears on this list.
- Some loans have citizenship, residency, or membership requirements.
Alternative Private Loan Disclosure
The Higher Education Opportunity Act of 2008 (HEOA) mandated lenders to produce the following disclosures to borrowers:
Application and Solicitation Disclosure- the lender must provide a general range of rates and fees so the borrower can make informed decisions when choosing a private lender
Loan Approval Disclosure- when an applicant is conditionally approved for a loan, the lender must send this disclosure with borrower specific rates and fees.
Final Disclosure- this is sent to the borrower after the loan terms are accepted and the school has certified the students eligibility for the loan. This disclosure gives the borrower a three-business day right to cancel period.
Alternative Private Loan Self-Certification
A lender must obtain a signed and completed private alternative loan applicant self-certification form. Your lender should provide you with the self-certification form and the means as to how this form must be completed (electronically or by paper). This form includes information about the availability of federal loans, the student’s cost of attendance, the student’s estimated financial aid and the difference between the cost of attendance and estimated financial aid.