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Alternative Loans are loans not guaranteed by the Federal government. The borrower (either student or parent) may borrow such a loan through various participants such as banks, credit unions, or savings and loan associations. There are many different types of alternative loans for different types of borrowers.
Alternative loans are not need based; rather, they are based on creditworthiness. Most students will need a creditworthy co-signer such as a parent or other relative in order to obtain a private loan. Terms and conditions applicable to these loans vary greatly. Factors such as interest rate, APR, length or repayment, loan minimum and maximum, and fees should be carefully considered when researching and choosing a private loan.
One feature of many private loans is the ability to completely postpone (defer) repayment until you graduate from college. Private loans almost always offer lower interest rates than credit cards do.
While we encourage students and families to pursue Federal financial aid before considering private education loans, there are many student/family situations where a private loan is viewed as a preferred alternative. Sometimes parents want their student to be responsible for his/her education. In other cases, the convenience of needing no Federal forms to borrow funds is also a consideration. Whatever your situation may be, borrow only what you need, and compare your options before you borrow.
The alternative loan process is a family-initiated process in which the family (student or parent) contacts the specific lender in order to borrow the loan. To make the selection process easier, Boston College has identified a group of selected lenders for our Preferred Lender List (best viewed in Firefox). If you select a lender from this list, you can be assured that you will receive outstanding borrower benefits and customer service. Visit www.bc.edu/offices/stserv/financial/finaid/undergrad/types_of_aid/loans_financing/altloans/altloanslenderselection.html for a description of the selection process for our Preferred Lender List.
Once you have been approved for the alternative loan of your choice, the selected lender will send Boston College a certification request, which will be completed by the Office of Student Services. This information is submitted online, the application is approved, and funds will be disbursed to the Boston College student account.
Funds are disbursed in two equal disbursements, Fall and Spring, in the form of a check made out to the student and Boston College. Once endorsed, the check will be deposited to the student account.
Should any disbursement create a credit balance, you may request a refund through the Agora Portal, by phone, or in writing. Please note that refunds cannot be issued before the first day of classes for any semester.
Repayment of student alternative loans begins six months after you graduate or fall below half-time (6 credits) enrollment at Boston College. Interest accrual begins at disbursement and may be paid as it accrues or it may be capitalized.
Repayment of parent alternative loans begins immediately after the full disbursement of the loan. Some lenders offer deferment options. Please refer to our Preferred Lender List (best viewed in Firefox) for more information.
Effective February 14, 2010, lenders of private education loans are required to collect a completed and signed Self-Certification Form prior to disbursing the loan proceeds. This applies to any private education loans that are not at least partially disbursed prior to the effective date. Private education loans include all Alternative Loans, as well as certain loans issued by Boston College directly. Individual lenders are implementing their own procedures to comply with this new regulation, so you should contact your lender directly if you have specific questions about the process for submitting this form.
On July 30, 2009, the Federal Reserve approved final amendments to Regulation Z (Truth in Lending) that revise the disclosure requirements for private education loans. The amendments implement provisions of the Higher Education Opportunity Act (HEOA) enacted in August 2008. Under the amendments, creditors that extend private education loans must provide disclosures about loan terms and features on or with the loan application, and must also disclose information about Federal student loan programs that may offer less-costly alternatives. Additional disclosures must be provided when the loan is approved and when the loan is consummated. The rules became effective on September 14, 2009, and lenders were required to be in compliance on February 14, 2010.