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Private Alternative Loan
A private alternative loan is a non-federal educational loan, through a private lending institution (not backed by the federal government), typically issued in a student's name and requiring a creditworthy cosigner. Some lenders also offer parent loans that can be borrowed by parents, family members, or friends to help students cover educational expenses.
Limitations
The amount you can borrow per year is determined by the amount needed to cover your educational expenses up to your cost of attendance, after subtracting the sum of all other financial aid you will be awarded for that period.
Smart Borrowing
Don’t forget to submit a FAFSA to learn if you quality for preferred aid sources like government grants and other types of financial aid. Remember, grants are free money that you do not need to pay back. On the flip side, loans must be repaid with interest. If you do need a loan, we recommend a Federal Direct Subsidized/Unsubsidized Loan before considering a private alternative loan. Finally, only borrow what you need.
Eligibility
To be eligible for a private alternative loan, you typically must enroll in six or more credits each semester. A private lender may not require a FAFSA. However, if you only wish to apply for a private alternative loan, and you refuse to submit a FAFSA, please contact the Financial Aid Office.
To apply for a private alternative loan, follow these steps:
- Choose a lender.
- Send all requested documentation – for you and your cosigner, if you have one – to your lender.
- Sign your loan application or promissory note. If you have a cosigner, s/he will also need to sign the application.
- If you are preapproved, accept or decline your loan offer from the lender.
- Complete the Private Alternative Loan Self-Certification form provided by your lender. All of the information needed to complete this form is found on your Estimated Cost of Attendance, available via the Student Portal. You may use this Self-Certification form, if your lender has not provided one to you.
- Return the completed form to your lender.
- Read and understand the three disclosures you will receive from your lender. You will receive one when you apply for your private alternative loan, another when you are approved and offered the loan, and a final disclosure just prior to disbursement.
| Starting Semester | Private Alternative Loan Application Timeframe |
|---|---|
| Fall | Apply any time after June 1 of that year, and at least three weeks before your tuition bill is due in early August. |
| Spring | Apply after October 1 of the previous year, and at least three weeks before your tuition bill is due in mid-December. |
Do not apply for a private alternative loan more than 90 days prior to the beginning of the semester for which you are applying. Otherwise, your credit check may run out, and your loan will not be valid at the time of scheduled disbursement.
Choose a Lender
Penn College uses ELMSelect as a tool for students and their families to begin researching student and parent private educational loans. A borrower may select any lender and is not restricted to the lenders presented on ELMSelect. If you have a preferred lender, you may want to check with that lender to learn if it offers an educational loan product.
The lenders appear on ELMSelect based on their quality of products and the services they provide to borrowers. This tool can prevent families from dealing with risky products and unknown lenders, and helps families make private loan decisions by providing reliable information in one place.
Because lenders and the loans they service can have different requirements, rates, terms, and services, you may wish to refer to our list of Questions for Your Private Alternative Lender when shopping for a lender.
Reduce or Decline
To reduce your private alternative loan or decline it, please contact the Financial Aid Loans Team. Be sure to include your full legal name, student ID number, loan type and the total amount per semester you want to retain or decline.
Your Rights
You have the right to select the private alternative lender of your choice. Penn College is not liable if you, the borrower, are dissatisfied with the rates, terms, or services provided by any lender, nor is Penn College responsible for any damages incurred by you as the result of your choice of lender.
To comply with the 2008 Higher Education Opportunity Act (enacted August 14, 2008) Penn College adopts a Code of Conduct for Education Loans to serve as the formal guiding principles in ensuring the integrity of the student aid process and ethical conduct of Penn College employees regarding student loan practices.