Alternative Loans

Beware of excessive loan debt!  Is an alternative loan a good choice for my future?

In the past decade student loan debt has more than doubled in the United States.  Much of this trend is due to the rising cost of tuition but also to increases in basic consumer costs.  Because of this students who are graduating are doing so with record amounts of debt.  Anyone considering a loan should seriously consider their earning potential, their wants and needs for the future for themselves and for their families before entering into any borrowing agreement.

The Financial Aid Office strongly encourages students, especially those who are taking out student loans, to enroll in FIN 1050 "Personal Finance" and FIN 2200 "Personal Financial Planning."  These courses can assist you in learning skills and personal habits that foster a strong and stable financial future.

Alternative loans are expensive private signature loans and often require a co-signer

Interest rates are variable and are not regulated as to how high they can go!

Interest rates are significantly higher than with Stafford Loans!

Interest is compounding even while you are in school!

Alternative Loans Cost More:

• $17,658.00 more than a Stafford loan.
• $13,501 more than an Unsubsidized Stafford Loan.
• $10,848 more than a PLUS.

Salt Lake Community College Policy on Alternative Loans

Because alternative student loans are based on your enrollment in school most alternative loans must be certified by the school you are attending. Salt Lake Community College requires you to do the follow:

• Have completed and fully processed a current FAFSA application available at www.fafsa.ed.gov
• Have submitted all required documentation to the Financial Aid Office
• Have been awarded all possible federally based financial aid available to you including subsidized and unsubsidized student loans (at lower interest rates!)
• We strongly urge you to apply for any scholarships for which you may be eligible

Once these steps are complete if you still need additional aid to meet your educational expenses for flight time, equipment, uniforms, etc. you can then apply for the alternative loan of your choice. Salt Lake Community College does not generally certify loans to cover living expenses and will only certify loans over the basic Cost of Attendance (as determined by applying for federal aid) to cover additional cost directly related to your program of study.

What is my Cost of Attendance (COA)?

The following are the estimated cost of attendance budgets for students attending at least 6 credit hours for the academic year.

What should I be aware of when looking at alternative loans?

As with any other loan, whether borrowing for a car, home, or for school, the wise consumer will shop for the right loan for them. Some important considerations when shopping for an alternative loan are:

• What will the interest rate be?
  
  
• When will interest begin to accrue?
  
  
• Are there options for repayment?
  
  
• Are there deferment/forbearance options?
  
  
• Are there "perks" for automatic withdrawal payments or making a certain number of on-time payments?
  
  
• Do I have the option of making interest-only payments while in school?

Additionally, remember to be an educated borrower. After all, it is your credit rating that suffers if you don't follow through with your payments. Be very careful in deciding the amount of loan you request and borrow only what you absolutely need. Although repayment may seem in the distant future those payments will become a reality sooner than you think. Always be a wise and educated borrower!  Here are some tips:

• Be sure to read your promissory note carefully before signing.  Don't rush it and be sure you understand it before signing.  If you don't understand something contact the lender for clarification.

• Go with a trusted lending institution. Don't fall for "to good to be true" advertisements.

• Figure out a budget before you borrow.

• Don't think only of what this loan means for your immediate needs but how it will effect your future options.  How will you meet your loan debt obligations?

• If paying the interest payments while in school is an option it will be in your best interest to do so.

• Know what effect having an outstanding alternative educational loan will have on your credit rating.

Flight Technology/Professional Pilot Students

When you apply for an alternative loan, please provide the Financial Aid Office with a copy of your private pilot's license, Medical 2 release, and most importantly, an Alternative Loan Form for the Professional Pilot Programs (available at the Redwood Campus) of your proposed class schedule for the loan period requested. This should be sent to the attention of Kathi Beecher at kathleen.beecher@slcc.edu and must be completed before SLCC receives the first disbursement of your alternative loan.

The following are links to lenders who currently offer Alternative Loans through Salt Lake Community College:

Fees/Interest Rate:

• Loan fees 0% to 9% in 1% increments
• prime +1%, adjusted quarterly
• Loan rates as low as Prime -1/2% to Prime +5.0%

Other Terms:

• $500 loan minimum
• Loan maximum cost of education
• 12 month grace period
• incidental loan option, $500 to $3,000

Key Bank  

• No origination fees
• 3 month LIBOR + 3.30% with co-signer
• 3 month LIBOR + 3.85% without co-signer

• $500 annual minimum, Annual maximum is cost of attendance minus financial aid
• Grace period 6 months
• Up to 20 years repayment depending on balance
• international students may apply

Fees/Interest Rate:

• No origination fees.
• Variable Interest rates based on the Prime Rate and credit.

Other terms:

• Make interest-only payments while in school.
• Loan amounts determined by cost of education less other financial aid received.
• Free Student Loan Counseling Program.
• Disburse the funds directly to the school.
• Fixed rate in repayment with terms up to 10 years.

• No Fee at disbursement or repayment of the loan - you receive the full amount borrowed in disbursements.
• 0.50% interest rate reduction for autopayment.
  

• Minimum loan amount $1000.
• Repayment deferred while in school and 6 month grace period.
• International students may apply with an eligible co-signer.
• May be used for past due balance incurred within 6 months.

• Prime +0.00%, 1.50%, 3.50%, or 6.00%, determined by credit

• Minimum loan amount $1000 first year; $500 thereafter
• Up to 12 year repayment

• 0.50% interest rate reduction with auto-debit from Wells Fargo account or 0.25% interest rate savings from any bank
• 0.50% interest rate savings after 48 consecutive on-time monthly payments