Alternative Loans
Alternative loans are credit-based student loans offered by private lenders. They are available to students who need funds in addition to their federal aid to meet educational expenses or for those students not eligible for federal aid. If you have reached your loan limit for the FFELP (Federal Family Education Loan Program) Stafford and Unsubsidized loan programs, but you still need money for your education, the alternative loan can help you. Additionally, the alternative loan option is beneficial to international students and to those students that are non-degree seeking or may be enrolled for less than halftime, or to dependent students whose parents are not willing to take out a PLUS Loan.
Like the PLUS, alternative loans are not based on need, but on the applicant's creditworthiness. As with the PLUS, the borrower can borrow the difference between the cost of attendance and financial aid (some lenders may have annual caps on the maximum amount borrowed). Repayment on most of these loans, however, starts six months after the student leaves school. Loan terms vary from lender to lender--each uses its own formula for calculating interest, some lenders charge fees and others do not, and each company has its own definition of creditworthiness. The interest rate is generally higher than that of the Stafford Loans, and interest may be capitalized more frequently. Please check with the lender for more information on each loan. Before applying for an alternative loan, please discuss all of your options with a financial aid counselor.
Below is a list of lenders frequently used by UMSL students. To apply for a loan, go to the lender web site (if available) or call the telephone number given. Students are welcome to investigate other loan sources on their own. More Detailed information on alternative loans.