Alternative educational loans are available from private lenders and offer additional financial assistance to students who have exhausted all other sources of funding for their education. These programs are meant to supplement federal, state, institutional and private aid when the cost of attendance (COA) is not fully covered by these programs.
We strongly encourage you to review all financial aid you have been offered to accurately determine the amount of alternative/private loan funds that you may need to borrow. Your financial aid information is available online through the HawkWeb or on your Financial Aid Award Notification letter you received. To better estimate your expenses, and to accurately complete self-certification information (part of the alternative loan application process), please review the UMES Cost of Attendance.
Before You Apply…
Before you apply for an alternative loan, it is important for you to realize that if you proceed with the alternative loan application process that you are making a financial decision that will impact your life well after graduation. Some of the factors you should consider are:
- What are realistic projections of your starting salary as well as future earnings potential in your field?
- What other loan obligations do you/will you have and how much of your future income is already committed to those debts? You can view your cumulative Direct Loan debt at https://nslds.ed.gov/nslds/nslds_SA/under “Financial Aid Review”.
- What are your lifestyle needs/desires after graduation? Can you afford to decrease your projected monthly net income by additional loan obligations?
- Can any changes be made to your current/future lifestyle needs/wants that would eliminate/reduce the need for an alternative loan?
Applying for an Alternative Educational Loan
If an alternative loan is the only financial aid you desire, the submission of a FAFSA is not required. It is highly encouraged, however, that a FAFSA be submitted in order to be considered for the most favorable aid for the student.
When you apply for an alternative loan, you must also complete a loan application, a promissory note, a self-certification form, and accepting all loan terms with the lender before the loan funds will be disbursed to the institution.
Choosing a Lender
We encourage you to contact a variety of established lenders about their alternative educational loan product(s). You have the right to select any lender you wish to use for an alternative loan. It is the responsibility of the student to thoroughly evaluate each lender before choosing the one that is right for you.
For your convenience, lenders that have provided alternative loans to UMES students within the past three years can be found online by utilizing ELM Select (click HERE to be taken to the site)
What to Consider When Selecting a Lender
Students are encouraged to research the interest rates, credit check requirements, conditions, terms, and repayment of alternative loans when selecting a lender. Below are some questions to ask when comparing lenders.
- Interest rate: What is the interest rate? Is the interest rate fixed (does not change) or variable (does change)?
- Are there any application or repayment fees?
- Can principal and interest payments be deferred while I am enrolled in school?
- Am I required to have a co-signer? Will a co-signer help lower my interest rate?
- Is there an option that my co-signer may be released from the loan after a specified time period?
- Do I have to be enrolled for a specific number of credit hours to apply for the loan?
- How long to I have to pay the loan back? Can I defer the loan if I enroll in graduate/law/medical school?
- Can the loan be used to resolve a prior balance? If yes, how long after that semester is over can I apply?
- Are there any other benefits/incentives offered with the loan?
The lender will perform a credit check to determine the borrower’s eligibility. If approved, the borrower and UMES will be notified and the loan will be received and processed electronically by our office. The lender will contact the borrower with additional requirements if the alternative loan cannot be approved based on the original application.
Repayment of Alternative Educational Loans
The date the first payment is due and terms of repayment, including deferment options vary by lender. Please review all disclosures and contact your lender with any questions or for more information.