Federal Stafford Loans have lower interest rates and better borrower benefits than Private/Alternative Loans. It is SPC policy that U.S. Citizens or permanent residents must first fill out the FAFSA application and apply for Federal Stafford Loans before applying for Private/Alternative Loans.
Private student loans (also referred to as "alternative educational loans") are different from federal student loans in that they are not guaranteed by the federal government, require a credit check, and often a co-signer. Terms and conditions vary significantly by lender. Carefully consider your needs, and then select a loan product that best meets your individual situation.
When researching your private loan you should pay close attention to the borrower benefits, fee's, interest rates, and repayment options. One thing of note is how the interest rate is calculated. Lenders use either the LIBOR average, Prime rate, or the 91 Day T-Bill.
More information on the LIBOR, Prime, and the 91 Day T-bill
Why Consider a Private Student Loan?
Private student loans provide an alternative choice when circumstances necessitate one. Consider a private student loan if:
- You have reached your Federal Stafford Loan borrowing limit.
- You have expenses that your financial aid doesn't cover because you applied too late and didn't get enough aid to cover your entire cost.
- You are enrolled less than half-time.
- You have a balance from a previous semester to pay.
- You plan on doing a study abroad program in a future semester.
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