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Financial Aid

Alternative Loans

Alternative education loans, also known as private education loans, help bridge the gap between the actual cost of education and the limited amount the government allows a student to borrow in its student loan programs.

Private loans are offered by private lenders and there are no federal forms to complete.  Eligibility for private student loans often depends on a borrower’s and co-borrower’s credit score.

Private education loans do not have the same benefits as the federal education loans, but are less expensive than credit card debt.  Federal education loans offer fixed interest rates, flexible repayment benefits, and forgiveness options. For these reasons, we recommend students exhaust eligibility for federal student loans before resorting to private student loans.

Private student loans have variable or fixed interest rates, with the interest rate pegged to an index, such as LIBOR or PRIME, plus a margin.

The LIBOR index is the London Interbank Offered Rate and represents what it costs a lender to borrow money. The PRIME Lending Rate is the interest rate lenders offer to their most credit-worthy customers. To check the current index rates, please visit BankRate.

The Office of Financial Aid has collected a list of lenders that students commonly use for alternative education loans. Loan products vary by lender. 

Merrimack College strongly recommends that a borrower contact the lender(s) for up-to-date information via the web address listed below.

Note: For the 2013-14 academic year, the Office of Financial Aid will not begin processing alternative loans until after July 1, 2013. Due to time limits on credit approval, it is recommended that families wait until after July 1 to apply for alternative loans. 

Citizens Bank
Digital Federal Credit Union
Discover Student Loans
Jeanne D’Arc Credit Union
Massachusetts Education Financing Authority (MEFA)
NJCLASS (New Jersey Residents Only)
Sallie Mae
SunTrust
Union Federal Private Student Loan
Wells Fargo Student Loans

 

You are not obligated to borrow from this list of lenders and may use any private lender of your choice.

The Merrimack College Office of Financial Aid recommends the use of private educational loan programs after all other types of financing options are considered.

Before borrowing an education loan, carefully consider present level of debt and repayment obligations on all loans.  Determine how much is needed to borrow by working out a budget for educational costs and subtracting all other resources (aid offered and accepted).  Remember, the ability to obtain loan funding is largely based on credit-worthiness, and with most programs, the co-signer’s credit-worthiness.

To satisfy the requirements of the Higher Education Act of 1965 and the recently amended section on the Truth in Lending, private/alternative educational loans borrowers must now be provided with several disclosures from the lender.  Borrowers must complete a Private Education Applicant Self-Certification Form when applying for non-federal loans. This form must be submitted to your lender during your application process. Please do not forward this to our office. When electronically applying on-line, the lender will provide the borrower the opportunity to fill out required information before they can proceed with the review and approval of the loan.

On the Private Education Applicant Self-Certification Form, borrowers will be required to complete the cost of attendance for the period of enrollment covered by the loan, as well as the estimated financial aid.  Definitions are listed on the second page of the form: Cost of Attendance, Estimated Financial Assistance, Lender, Period of Enrollment, Private Education Loan and Title IV Student Financial Aid.

Note: Students may obtain their individual Financial Aid award on myMack under the Student Info Tab.  For more information on the 2013-2014 Cost of Attendance figures that students will need to use to complete the Self-Certification form, please refer to the Tuition and Expenses web page.

Students are eligible to borrow alternative loans to bridge the gap in what is not covered through their financial aid package. A student is limited to borrowing their cost of attendance less any other financial awarded (institutional, federal, state, outside scholarships). Students can borrow education loans to pay for tuition, fees, room and board, as well as books, and other personal or educational supplies. For questions on your individual cost of attendance, please contact our office. 

Education loans are designed to pay for direct costs first. Any excess borrowed will be available to the student in the form of a refund check. Refunds are not available until after loans have disbursed, which occurs after the add/drop period. For the Fall semester, this is typically the first week in October. For the Spring semester, this is typically the beginning of February.