Alternative Loans

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Alternative loans are private loans offered by lending institutions, and they should be treated as a last-resort option. They are not part of the federal government’s Direct Loan program. The interest rates and repayment terms with alternative loans are generally less favorable than those of the federal student loan programs.

We encourage you to file the Free Application for Federal Student Aid (FAFSA®) in order to be considered for all other available aid programs and that you first utilize any grants, scholarships, work-study and direct loan eligibility before considering alternative loans.

If you need additional funding to supplement your financial aid and scholarship package, alternative student loans are an option.

  • The maximum amount you can borrow is the cost of attendance minus any financial aid (grants, work-study, federal student loans and federal parent loans) you receive. Be aware that the amount certified by Texas State may, in order not to exceed your cost of attendance, be less than the amount you requested on your initial application.

    Find out more about how financial aid works.

  • To be sure you choose the right alternative loan, you will want to consider the following:

    • Does my school have to certify the application?
    • Do I need a cosigner?
    • How strict are the credit requirements?
    • How long does the application process take?
    • How will I receive my loan funds?
    • When will my first payment on my loan be due?
    • Does the loan have an annual or aggregate limit?
    • How much in total loan fees will I pay?
    • What is the current interest rate and how is it calculated?
    • How long is the repayment period?
    • What are my repayment options?
    • Do I have any deferment options?
    • Do I have a grace period with this loan? If yes, how long?

    Texas State does not recommend any specific lenders for private alternative loans. If you believe that an alternative loan may be best for you, we recommend comparing the loan products and lenders to find the best interest rate and repayment options for your situation. Remember that you will have to pay back these loans with interest, so only borrow what you need.

    Texas State uses ELMSelect as an online, lender-neutral platform to display a historical list of lenders and education loan products that our students have used over the past award year. These lenders have not been ranked and are presented in no particular order.

    Visit ELMSelect to view alternative loan options.

  • Provisions of the Truth in Lending Act have resulted in a number of changes in the process for applying for and receiving private education loans. Lenders who provide these loans must comply with the following requirements:

    • Lenders must provide three separate loan disclosures to borrowers: 1) at the point of application, 2) when the loan is approved and 3) before the loan is disbursed.
    • A waiting period of three to seven business days is required between the time the borrower receives the final loan disclosure and the time that the loan is disbursed.
    • Students must also sign a self-certification form and submit it to the lender before the loan can be disbursed.

    Your lender should provide you with all of the information you need to know about these requirements. If you have questions, feel free to reach out to us.

  • You must submit a completed Private Education Loan Applicant Self-Certification form to your lender. Your loan cannot be disbursed until your lender receives it.

    Some important tips about the self-certification:

    • Your lender should provide you with a copy of the required Private Education Loan Applicant Self-Certification form. Complete the form and return it to your lender as soon as possible. Contact your lender for your application ID or other identifier that will help to match the form with your application. This form is required by provisions in the federal Truth in Lending Act.
    • To complete the form, you will need to know your cost of attendance and your total financial aid package (estimated financial assistance). If you receive financial aid, this information can be found on your financial aid shopping sheet on Texas State Self-Service.
  • Alternative loans are subject to a 3-day cooling off period as required by the federal Truth in Lending Act. This holding period is in addition to the regular processing times required by both your lender and our office. As a result, it can take 3-4 weeks from the time you submit your loan application to the time funds are ready to disburse. So, it is recommended that you submit your loan application to your lender at least 4 weeks prior to the start of the semester.