Alternative Loans are loans not guaranteed by the Federal Government. The borrower (either student or parent) may borrow such a loan through various participants such as banks, credit unions, or savings and loan associations. There are many different types of alternative loans for different types of borrowers. Alternative loans are not need-based; rather they are based on credit worthiness. Most students will need a credit worthy co-signer such as a parent or other relative in order to obtain an alternative loan. Terms and conditions applicable to these loans vary greatly. Factors such as interest rate, APR, length of repayment, loan minimum and maximum, as well as fees should be carefully considered when researching and choosing an alternative loan.
One feature of many alternative loans is the ability to completely postpone (defer) repayment until you graduate from college. Alternative loans almost always offer lower interest rates than credit cards. While we encourage students and families to pursue federal financial aid before considering alternative loans, there are many student/family situations where an alternative loan is viewed as a preferred alternative. Sometimes parents want their student to be responsible for his/her education. In other cases, the convenience of needing no Federal forms to borrow funds is also a consideration. Whatever your situation may be, borrow only what you need and compare your options before you borrow.
| Student Requirements for Private Educational Loans |
Effective February 14, 2010, lenders have new requirements for processing and disbursing private education loans. Check with your specific lender regarding their process (i.e. online or paper) for certification and disbursement. For your convenience, we have listed some of the requirements below.
1. Self-Certification Form: Student borrowers are now required to complete a Self-Certification Form for each loan application they submit and return it to their lender as part of the loan application process. Each lender will likely provide you with a copy of this form; or download the form using the above link. Most lenders recommend that you use the form they provide. All Self-Certification forms should be sent to the student's specific lender and NOT the Financial Aid Office. The Self-Certification form requires you to report your cost of attendance and estimated financial assistance in Section 2.
2. Active Acceptance of Loan: Student borrowers are now required to "actively accept" the terms of their loan approval before their school will be notified that school certification is required. The lender's terms for how to "accept" the loan terms can be found on the private loan approval disclosure form that they will provide to the borrower.
3. Right to Cancel: Borrowers and/or cosigners have the right to cancel or rescind a loan offer within 3 business days after receipt of Final Disclosure. During this time, the lender cannot disburse loan funds. This cancellation period cannot be waived in order for funds to disburse more quickly. This may cause a delay in the disbursement of loan funds to your student account. Be sure to apply several weeks before funding is needed.
Direct-To-Consumer Loans
We strongly suggest students make use of other loan options before using direct-to-consumer loans. A student can contact their Financial Aid Counselor to discuss alternative loan options. Direct-to-consumer private loans are not certified by the school. The student supplies enrollment verification to the lender, and the loan proceeds are disbursed directly to the student. Students must ensure that the funds are in their possession on or before the payment deadline for each semester, as they will not appear as "anticipated aid" on the student account statement.
The Alternative Loan process is a family-initiated process, in which the family (student or parent) chooses the loan they wish to borrow. To make the selection process easier, the Museum School had identified a group of selected lenders for our Preferred Lender List, available through the ELMSelect Web site. If you select a lender from this list, you can be assured that you will receive outstanding borrower benefits and customer service.
Funds are electronically disbursed by ELMSelect in two equal payments (fall and spring) and will appear on your student account no earlier than ten days before the start of classes for that academic year.
Should any disbursement create a credit balance, you will be issued a refund check by the Business Office. This refund will be mailed to your billing address unless you request it to be mailed to a different address.
Repayment of student alternative loans begin six months after you graduate or fall below half-time (6 credits) enrollment at the Museum School. Interest accrual begins at disbursement and may be paid as it accrues or it may capitalize. Repayment of parent alternative loans begins immediately after the full disbursement of the loan. Some lenders offer deferment options. Please refer to our preferred lender list for more information.
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