Non-Federal Alternative Loans
Some students and families will look beyond the financial aid offered through federal, state, and institutional resources from UC toward loan programs offered by private lenders.
Borrowing for educational costs should be done with an eye on the future debt. But such borrowing can make college more affordable now to lead toward higher earnings when in repayment.
Amounts and Terms
Many private lenders offer non-federal loans. While products may be similar, different lenders will have unique features to their loan, and sometimes you will find multiple loan options to chose from with the same lender.
You can select your own lender. UC will not require only select lenders. At the same time, to help students compare loans, we have worked with lenders our students have used in the past to provide updated information in a comparison tool called FastChoice. We also have basic information to compare alternative loans to Federal Parent PLUS Loan borrowing. Overall, you want to explore options and compare loan products to seek out the option that is best for your situation.
In addition to finding the loan product, you need to determine the amount to be borrowed. The loan borrower (in most cases the student and in other cases it may be a parent) for alternative loans may borrow up to the cost of attendance minus all other financial aid the student will receive. That maximum eligibility is reflected on an award as the Estimated Remaining Costs amount. Families can also contact Enrollment Services at 513-556-1000 or email@example.com to help determine a desired loan amount, particularly if they are targeting specific costs to be met with the loan.
Alternative loans, unlike federal student loans, are credit-based. The borrower will be reviewed for approval and may even need a credit-worthy co-signer or endorser to gain approval since college students typically don't have a long credit history.
Applying for an Alternative Loan
Once you have gotten approval on the loan product of your choice, you will need to complete the loan process as follows:
- Complete credit check and promissory note for your loan.
- Work with your lender to complete the process in the manner they desire.
- Alternative loan programs each have their own application process and most will offer electronic completion options.
- Contact your private lender directly for instructions on the loan promissory note process.
- Complete the Loan Self-Certification Form
- This form will be needed by your lender to determine eligibility.
- Though you may plan on borrowing your alternative loan for multiple years, the amount requested on an alternative loan is only for one academic year.
- While you are eligible to borrow up to the cost of attendance minus other aid resources, you can elect to borrow less.
UC will be informed of your loan approval and completion of the process by your private lender. Student Financial Aid will then certify your eligibility based on the lender's requirements of a school. When approved by UC, the amount of the loan will be based on the amount requested by your lender or the maximum eligibility, whichever is lower. It is then posted on the student award offer and set for disbursement at the appropriate time. This process of awarding and certifying the loan can take up to a week following the completion of the process with your lender.
In cases of alternative loan increases or decreases, you will work directly with your private lender. Increases often require beginning the process anew for the increased loan amount while decreases may be quickly handled by your lender.
Alternative Loan Counseling
We encourage all alternative loan borrowers to complete loan counseling available through the FastChoice product. At the same time, alternative loan counseling is completed voluntarily.
Non-federal alternative loans are one option to cover unmet educational costs, address non-tuition costs, or reduce reliance on parent loans.
Other options include
- Utilizing family and personal resources
- Seeking a Federal Parent PLUS Loan by a parent of a dependent, undergraduate student
- Using the semester payment plan
While an alternative loan may be available to you throughout your enrollment, please complete any alternative loan process at least one month prior to the start of a term to ensure timely disbursement of the loan funds.