Private and alternative loans
Private (“alternative”) loans are credit based student loans offered by private lenders. They can help pay allowable educational expenses not covered by financial aid.
Private loans are not part of the federal loan program and are not guaranteed by the federal government. Federal loans tend to have more favorable interest rates and repayment terms; families should consider borrowing the Federal Direct student loans, as well as the Federal Direct Parent PLUS loan, before borrowing a private loan.
Typically private loans:
• Require a credit worthy co-signer, with U.S. citizenship or permanent resident status
• Can have fixed or variable interest rates
• Have an interest rate based on a financial benchmark such as Prime or LIBOR plus a margin that is usually based on the creditworthiness of the borrower and cosigner
• Accrue interest while a student is in school
• May require repayment while you are still in school
Prior to borrowing alternative/private loans you should:
• Utilize all federal, state and institutional financial aid first
• Compare federal loans to private loans on the Federal Student Aid website
• Determine the amount of funds you truly need to borrow- avoid taking on unneeded loan debt
Here are a few items to research when choosing a private loan:
• What is the current interest rate, the highest potential interest rate, and how often is the rate adjusted?
• What fees are associated with the loan?
• What is the repayment schedule for the loan and are there penalties for early repayment?
Augustana College does not have a preferred lender list or any type of preferred lender arrangement. We do not promote, recommend or endorse any lender on our historical listing. Our listing displays lenders used by students within the past 3 years. Lenders that no longer offer student loan products have been removed. You are not limited to lenders on our historical listing; we will work with any lender of your choosing.
July 15 is our recommend deadline for private loan applications to ensure ample processing time.
Private Education Loan Applicant Self-Certification Form
Students applying for alternative and private loans must complete and submit to their lender a Private Education Loan Self-Certification Form prior to the processing of the loan by the lender. Call the Office of Financial Aid if you need additional help completing the form.
Code of Conduct for education Loans
The Higher Education Opportunity Act of 2008 (HEOA) requires institutions of higher education to establish and follow a Code of Conduct with respect to student loans that prohibits conflicts of interest for any financial aid professional [HEOA § 487(a)(25)]. In accordance with this requirement, each staff member of the Office of Financial Aid at Augustana College signs the following conflict of interest policy and code of conduct on an annual basis.