Office of Student Aid : Loans : Private Alternative Loan
Private Alternative Loan
A private alternative loan is a non-federal education loan, through a private lender, typically in the student’s name and requiring a cosigner. Approval and interest rates are based on the creditworthiness of the borrower and cosigner. Each alternative lender has different eligibility requirements, loan rates, terms, and conditions.
Exhaust Federal Student Aid Options First
Students who are eligible for federal student aid should complete the FAFSA and exhaust all federal, state, and University aid options, including federal loans, before applying for a private alternative loan.
Federal student loans generally have more favorable terms and conditions than private loans. We recommend that you utilize all federal loan eligibility before turning to private loans.
Plan Ahead
Amendments to the Truth in Lending Act (TILA) require that you complete a self-certification form and submit it to your lender for each alternative loan application. If your lender does not provide you with the form, print the Private Education Loan Applicant Self-Certification and access your Student Aid Summary on eLion to obtain your cost of attendance and your estimated financial assistance for the period of enrollment covered by the loan. Return the self-certification form to your lender upon completion. Keep in mind that current students will not have access to 2011-12 cost and student aid information on the Student Aid Summary until after awarding in mid-June.
TILA also requires lenders to provide you with three disclosures: 1) upon your application, 2) when you are approved, and 3) at least 3 days prior to disbursement. Timing of the last disclosure may delay loan disbursements by an additional 1-2 weeks. Please plan accordingly.
Do Your Research
Compare the Federal Direct PLUS Loan to Alternative Loans.
Ask questions of your lender.
Compare private alternative loan products.
Budget wisely and borrow only what you absolutely need.
Calculate your estimated monthly payment and total repayment amount.
Review your eLion Loan Debt Summary for current loan obligations.
Follow Important Guidelines:
- Apply for your alternative loan within 90 days of the beginning of the semester so your lender’s credit does not expire
- Schedule ALL of the courses you plan to take BEFORE you apply for your loan so your loan is certified for the correct amount. Increases may not be possible after the loan is certified
- For summer session(s), you must complete a separate loan application, since it is a separate loan term
An alternative loan is an agreement between the borrower and cosigner and the lender. Penn State cannot in any way be held liable in the event the borrower is dissatisfied with the rates, terms, or service provided by any lender, nor is Penn State responsible for any damages incurred by the student as a result of the student's choice of lender.
You have the right to select the alternative lender of your choice. The following is a list of lenders with whom Penn State students has conducted business in the past 3-5 years. Neither Penn State nor the Office of Student Aid promotes, endorses, or recommends any of these loan products or lenders by including them on the list. The following lenders are listed in alphabetical order only—there is no ranking.
Valid Loan Term Dates at Penn State:
Summer 2011 Only -- May 2011 to August 2011
Fall 2011/Spring 2012 -- August 2011 to May 2012
Fall 2011 Only -- August 2011 to December 2011
Note to International Students: Many alternative lenders will approve a loan for international students who have a creditworthy US Citizen or permanent resident as a cosigner. If you are an international student, contact the lender of your choice to determine if you are eligible.
Charter One TruFit Fixed or Variable Rate Student Loan
Degree students only
Enrolled at least half time
Chase Select
Degree and non-degree students
Can be enrolled less than half time
CitiAssist
Degree and non-degree students
Can be enrolled less than half time
Citizens Bank Trufit Fixed or Variable Rate Student Loan
Degree students only
Enrolled at least half time
Credit Union Ed Access Private Student Loan (follow link to review participating credit unions)
Degree students only
Enrolled at least half time
Must be making satisfactory academic progress
Credit Union Student Choice (follow link to review participating credit unions)
Degree students only
Enrolled at least half time
Must be making satisfactory academic progress
Discover Student Loans
Degree students only
Can be enrolled less than half time
(Note: Loans for students who are less than half time go into immediate repayment after grace period.)
Must be making satisfactory academic progress
Penn East Federal Credit Union
Degree students only
Can be enrolled less than half-time
PNC Solutions Loans
Degree students only
Enrolled at least half time
Smart Option Loan Lenders:
Degree and non-degree students
Can be less than half time
AMS Smart Option Loan
FifthThird Bank Smart Option Loan
Nellie Mae Smart Option Loan
Regions Bank Smart Option Loan
Sallie Mae Smart Option Loan
Sun Trust Academic Answer and Custom Choice Fixed or Variable Rate Loans
Degree students
only
Enrolled at least half time
US Bank No Fee Variable Education and Fixed Rate Student Loans
Degree students only
Can be enrolled less than half time
Must be making satisfactory academic progress
Wells Fargo Collegiate Fixed or Variable Rate Loan
Degree students only
Can be enrolled less than half time
Private Alternative Loans Offered by State Agencies
(Available to students who reside within the state indicated)
This list is not exhaustive. You may want to investigate possible private alternative loan options through your home state higher education agency.
Be aware that many of these loan programs may have limited funding.
Alaska Supplemental Education Loan
Alaska residents only
Degree students only
Enrolled at least half time
Must be making satisfactory academic progress
Connecticut Higher Education Supplemental Loan Authority (CHESLA)
Connecticut residents only
Degree students only
Enrolled at least half time
Must be making satisfactory academic progress
Maine Educational Loan Authority (MELA)
Maine residents only
Degree students only
Enrolled at least half time
Massachusetts Educational Financing Authority (MEFA)
Massachusetts residents only
Degree students only
Enrolled at least half time
Must be making satisfactory academic progress
New Jersey Class Loan
New Jersey residents only
Degree students only
Enrolled at least half time
Must be making satisfactory academic progress
FAFSA must be submitted
Rhode Island Student Loan Authority (RISLA)
Rhode Island residents only
Degree students only
Can be enrolled less than half time
South Carolina Palmetto Assistance Loan (PAL)
South Carolina residents only
Degree students only
Enrolled at least half time
Must be making satisfactory academic progress
Vermont Student Assistance Corporation (VSAC) Advantage Loan
Vermont residents only
Degree students only
Enrolled at least half time
Must be making satisfactory academic progress
FAFSA must be submitted
If You Are Denied:
If you are denied, you and your cosigner can contact the lender and request an Adverse Action Credit Letter to determine why. You should also request a copy of your credit report to review your credit information.