Alternative Loan Programs

As costs rise, more and more students find that the combination of grants and Federal Loans they receive don't always cover all of their budget. Consequently, they come to us to find other options to help finance their education. Alternative student loans can help, but keep in mind they work very differenlty then their Federal counterparts.

Here's some important infromation on Credit-Based Loans:

Alternative loans are credit based and require a credit check which determines your eligibility and your interest rate.

Lenders have varying requirements for credit scores and often add fees to, and sometimes reject loans for those students who have bad or no credit. However, students who have a cosigner with good credit can sometimes gain approval, and/or get a better interest rate then they otherwise could on their own.

It is recommended that you only apply one time with your lender each year. Allowing lenders to check your credit is called an "inquiry," and can have a negative effect on your credit if you've had several in the last six months. Inquiries can be anything from a seeking a car loan to opening up an account at Old Navy. Be sure to research the benefits of each loan program and choose a the one that best fits your needs before applying.

While Alternative Loans carry a higher interest rate then Federal Loans, their rates are typically lower than a personal loan or a mortgage, and definitely lower than credit cards.

The amount you can borrow in Alternative Loan funds is found by taking your Budget minus any Aid you've already been awarded.

Your "Budget" includes allotments for:

1. Tuition
2. Health Insurance
3. Books and Equipment
4. Living expenses

Your "Aid" includes:

1. Stafford Loans
2. Perkins Loans
3. Grants
4. Scholarships
5. Tuition Waivers
6. College Work Study.

So if your "Budget" = $25,000 and your "Aid" = $20,000, you're eligible for $5,000 in Alternative Loan Funds.

The lender you go through may approve you to borrow more money then you are eligible to receive. The Office of Student Financial Aid will certify the amount you are eligible for (except in the case of Medical Residency & Relocation Loans) . If you are unsure as to how much you can request, feel free to contact our office and a counselor would be happy to let you know the exact amount.

10/17/2008

The Office of Student Financial Aid
600 South Paulina Street, Suite 440 Chicago, Illinois 60612
Phone: (312) 942-6256
Fax: (312) 942-2732
financial_aid@rush.edu