Applying for an Alternative Loan or Private Loan
The Office of Financial Aid encourages first-time borrowers to begin the alternative loan pre-approval process early, as this allows time to resolve any issues on your credit report and to secure a co-signer for the loan, if necessary. Generally, credit checks for private educational loans are more stringent than the credit check for the Federal Direct Graduate PLUS Loan. Therefore, students with credit issues may find it easier to obtain credit approval for a Direct Grad PLUS Loan. Additionally, students planning to pursue a career in public interest legal work should consider borrowing through the Federal Direct Graduate PLUS Loan instead of through an alternative loan, since federal loan debt can be forgiven after ten years in public interest work through the public interest loan forgiveness provision of the College Cost Reduction and Access Act.
Students apply for alternative educational loans annually and may borrow up to the cost of attendance less other financial aid for the enrollment period. Student should apply for a loan to cover their needed cost for the entire academic year. For most students this is the fall and spring semesters. Students should not apply for a loan semester by semester unless directed to do so by the Office of Financial Aid. Loan fees and interest rates vary by lender and are often based on a student's credit score. Interest begins to accrue upon disbursement of the loan; however, monthly loan payments may be deferred until after graduation.
Students should apply for an alternative educational loan after receiving their award letter and prior to receiving their semester billing statement from Suffolk University Law School, in order to determine the loan amount to request. The Office of Financial Aid encourages students to review their budget and borrow conservatively. To apply, contact your preferred lender directly to complete the loan application. Borrowers should note loan applications will be certified for your entire academic year enrollment period only, and will not be certified by semester. Borrowers should plan for their entire academic year needs when submitting an application. Once an application is approved, the lender will send a request for certification to the Office of Financial Aid. Once the loan is certified you will receive a revised award letter which reflects the addition of the new loan. Suffolk University Law School will process alternative educational loans through any lender.
Students should compare alternative educational loan lenders to determine which lender best meets their needs. Suffolk University Law School has no financial interest in a student’s choice of lender. Students should be aware, however, that each time they apply for a loan with any lender, a credit check is performed. Students denied an alternative educational loan should contact the credit department of the lender to determine the reason for the denial. Students who cannot resolve their credit issues and obtain the loan may be able to re-apply for the loan with a co-borrower, or may apply for a Federal Direct Graduate PLUS Loan.
New Requirements for Alternative Loans
As of February 14, 2010, federal regulations were implemented which require lenders to provide more in-depth information on alternative student loans, interest rates, and repayment options. As part of “the Higher Education Opportunity Act,” Title X is specifically aimed at private lenders and established new regulations that affect the way you receive, and are approved for, private student loans. Listed below are some of these new requirements:
Self Certification Form: As part of the loan application process, student borrowers are now required to complete and return to their lender a self-certification form for each loan application submitted to the Office of Student Financial Services. An approved borrower must fill out a self-certification form (usually provided by the lender) and will be required to provide information on “cost of attendance” and “estimated financial aid.” Obtain a self-certification form. To avoid unnecessary delays, be sure to return this form to your lender and not to the Office of Student Financial Services.
Loan Approval Disclosure: Once your loan is approved, your lender will provide you with a statement that includes your interest rate, loan details and repayment options. Student borrowers are now required to “actively accept” the terms of their loan within 30 calendar days before their school will be notified that school certification is available. The lender’s terms for how to “accept” the loan terms can be found on this disclosure statement.
Right to Cancel: Borrowers and/or cosigners have the right to cancel or rescind a loan offer within three business days after receipt of the Final Disclosure. During this time, the lender cannot disburse loan funds. Be aware the cancellation period cannot be waived in order for funds to disburse more quickly. This may delay the disbursement of loan funds to your student account, so be sure to take it into consideration when estimating the timeline for bill deadlines.
The Office of Student Financial Services will not certify a student’s alternative loan until all required lender documentation is complete. If you have questions regarding the status of your loan applications, please contact your lender.
Important Things to Consider When Applying for an Alternative Educational Loan
- Exhaust all forms of federal aid prior to borrowing an alternative or private loan.
- Complete the FAFSA to be considered for federal aid, including Federal Direct Loans.
- Consider a Federal Graduate PLUS loan.
- Carefully Determine the Amount of your alternative loan to borrow no more than is actually needed.
- Be sure to plan for both fall and spring semester costs and borrow only the amount you actually need to cover your educational-related expenses. Keep in mind you may be able to significantly reduce your borrowing by covering yearly costs with a combination of sources: savings, present income, payment plans, and federal loans.
When Choosing an Alternative Lender
Suffolk University Law School students may select an alternative lender of their choice. The Office of Financial Aid will process any alternative loan application submitted by the borrower provided all eligibility requirements are met.
- Here you will find contact information and details on many available alternative loan programs. We encourage you to compare all programs before selecting the best option for you. When doing your research, be sure to visit the individual web sites for each program you are considering and keep in mind that your local bank or credit union may be another source to consider when choosing an alternative loan program.
- Understand fixed vs. variable interest rates: Fixed interest rates will not change during the entire life of the loan, although they may be slightly higher than some variable rates currently. Variable rates could rise during the loan term, which could lead to higher monthly payments. Choosing a loan with a low variable rate over a loan with a fixed rate may be best for a student who plans to pay off the principle of the loan in a short period of time.
- Take into consideration the total "price" of a loan: The interest rate is not the only factor for loan price comparison; look at the Annual Percentage Rate (APR), as well as any fees associated with the loan. A loan with a lower interest rate might seem more favorable, but high fees on the lower rate means it might actually be more expensive overall.
- Review deferred payment vs. immediate repayment options: Some lenders require immediate repayment on their loans. These monthly payments, however, can be as low as $25 a month and make a significant difference in the overall "price" of the loan. If the loan you choose offers deferred payments, making small payments while in school will help lower accrued interest and can make a dramatic difference in the length of time it takes to repay the loan.
- Use a Co-Borrower: A credit-worthy co-signer is often required for an application to be approved. In most cases, using a co- borrower results in lower interest rates and better loan terms. Even students with a credit history are encouraged to apply with a credit-worthy co-signer, since it could reduce interest rates significantly and save hundreds of dollars over the life of the loan.
- Understand loan eligibility requirements: Most lenders require a credit-worthy borrower with income verification for approval. Many loan products also have additional eligibility requirements that may include: satisfactory academic progress, minimum enrollment status (at least half time enrollment), and type of degree program. Before applying, make sure you meet all eligibility requirements.
Fair Lending Practices - Code of Conduct
Suffolk University is committed to the highest standards of professional conduct and ethical behavior. Ensuring the integrity of the student financial aid process and programs is critical to providing equity and access to higher education. With the Reauthorization of the Higher Education Act of 1965, Congress required that all colleges post a Code of Conduct relating to financial aid, alternative or private lending and student choice. Hence, the staff in the Office of Financial Aid herein confirms that we adhere to the following sound practices:
I. University employees do not receive any personal benefits from Lending Institutions. No member of the Student Financial Services staff will accept anything of more than a nominal value on his or her behalf of another person or entity from any Lending Institution. For example, cash, stocks, gifts, entertainment, expense-paid trips, etc., will never be accepted from a Lending Institution. Likewise, an individual will never accept payment or reimbursement from a Lending Institution for lodging, meals or travel to conferences or training seminars.
II. The University does not provide any advantage to a Lending Institution. The Staff in the Student Financial Services does not accept anything of value from any Lending Institution in exchange for any advantage or consideration provided to the Lending Institution related to its student loan activities, including, but not limited to revenue-sharing, printing costs or below-cost computer hardware or software. Likewise, the university does not allow any Lending Institution to staff the Student Financial Services Office or the Student Services calling center at any time.
III. The University makes appropriate use of any “Suggested Lender Lists”. The selection of the Lending Institutions for inclusion on the private/alternative loans Suggested Lender List is based solely on the best interests of the university students and their parents without regard to the financial interests of the university. We abide by the following:
IV. University employees do not serve on lender advisory boards for remuneration. No officer, trustee or employee of the university who makes financial aid decisions for the university or who is employed in, supervises or otherwise has responsibility or authority over the university Office of Student Financial Services will receive any remuneration for serving as a member or participant on a student loan advisory board of a Lending Institution, or receive any reimbursement of expenses for such service.
Bar Study Loans
Bar study loans are private educational loans which are available to assist law students and recent graduates with costs associated with taking the bar and living expenses during the study period leading up to the exam. Like private educational loans, bar study loans require a credit check. Bar study loans are not considered part of a student’s financial aid. Students should apply for the loan directly with the lender of their choice. The interest rate, fees, borrowing limits, and time frame in which students can borrow the funds varies by lender. Once approved, the loan funds are sent by the lender directly to the student. Students also select the date(s) they wish to receive the loan funds. Generally, students can apply for a bar study loan up to one year prior to graduation and no later than six months to twelve months after graduation ,based on the lender. The maximum loan amount ranges from $12,000 - $15,000, based on the lender. To apply, contact your preferred lender directly to complete the loan application. Suffolk University Law School will process bar study loans through any lender and certifies only applications that have been approved for credit by the lender. Students should not bring paper certification requests to the office.
Students should compare bar study loan lenders to determine which lender best meets their needs. Suffolk University Law School has no financial interest in a student’s choice of lender. Students should be aware, however, that each time they apply for a loan with a lender, a credit check is performed. The interest rate and fees for bar study loans are often based on the student’s credit score.