Alternative Loans
The federal Higher Education Opportunity Act (HEOA) of 2008 established a code of conduct applicable to financial aid employees and universities as they administer the Title IV Loan program. In general, the Code prohibits any financial aid employee or university from participating in any revenue-sharing arrangements with any lender, or from receiving gifts from any lender, guarantor or loan servicer in exchange for providing Loan Funds to its student population.
Alternative Loans
Alternative Loans should be considered as a last resort when financing your college education. We strongly encourage you to borrow from the Federal Student Loan program before considering Alternative Loans. Additionally, graduate students are encouraged to apply for a Federal Graduate PLUS Loan before applying for Alternative Loans.
Generally, you will receive a better interest rate on Federal Student Loans than with Alternative Loans. However, if you need additional funding beyond your Federal Student Loan eligibility, Alternative Loans may help you cover unmet educational expenses. Researching different private lenders and their loan products, their benefits, as well as exploring other means of financial aid before applying for an alternative loan, is to the advantage of the student. We recommend that you use alternative student loans conservatively as the interest rate can be variable.
Alternative Loans are made by banks and other financial institutions and are subject to their terms. Eligibility for these loans requires a credit check and students are often required to have a co-signer to qualify. Each lender uses its own pricing model (1) based on either the LIBOR (London Interbank Offered Rate) or prime rate (as published in the Wall Street Journal) and (2) typically based on the strength of the credit score and history of the student and/or cosigner. Depending upon the lender chosen, interest accrues from the date of disbursement and can be paid while the student is enrolled, or deferred and capitalized at the time of repayment. All lenders require the completion of a Self-Certification Form. If your lender has not provided this for you, these forms are also available in the Financial Aid Office.
Tennessee Tech University does not endorse or recommend any specific private alternative loan lender. In determining which Alternative Loan is best for your needs, we recommend you research and compare loan interest rates, fees, repayment options, and eligibility requirements.
Tennessee Tech University has chosen to use FASTChoice to display its historical Alternative Loan Lender List. The lenders and loan options presented were composed of all lenders used by Tennessee Tech students within the past 3 years.
FASTChoice offers the ability to:
- Compare and contrast lenders so you can choose the best option for your financial needs
- A payment calculator tool to help you figure what your future student loan payment may be
- A glossary tool to help define any loan or financial terms you may not be familiar with
- A Borrowing Essentials tool to instruct borrowers on the basics of taking out a private Alternative Loan and how your lenders determine if you are eligible and approved
- The ability to apply for an Alternative Loan once you have decided which loan is best for you
You can access FASTChoice by clicking on the link below or copying and pasting the URL into your internet browser (Due to certain browser requirements, you may need to update your current browser).
https://choice.fastproducts.org/FastChoice/Welcome.do?configId=1354901802497
You are free to select any lender you choose, including those not represented. Application processing will not be delayed unnecessarily if you choose a lender not represented here. If you choose a lender that is not represented, contact your lender and request that they send certification requests via ScholarNet. If your lender of choice does not participate in ScholarNet, please have the certification request sent via email to financialaid@tntech.edu, ATTN: Loan Specialist.
Alternative Loan Application Process
- Many Alternative Loan lenders provide an online application. After you carefully compare the different lenders' loan information, you may want to verify the following information with the lender.
- After you apply, the lender will send you three separate disclosures during the Alternative Loan process. You must sign and return these disclosures to the lender in a timely manner. You will be required to complete a Self-Certification Form.
- After you are pre-approved for the Alternative Loan and have returned any required paperwork to the lender, the lender will send a certification request either by paper form or electronically to the Tennessee Tech Financial Aid Office. The Financial Aid Office certifies maximum loan eligibility up to the Cost of Attendance minus other financial aid and resources.
- If you have submitted all required paperwork and the Tennessee Tech Financial Aid
Office has completed the certification request, the lender should be ready to disburse
your loan funds to Tennessee Tech depending on your loan period. If you have a fall/spring
loan period, then half of the loan will be disbursed equally between the fall and
spring semesters.
- Does the lender process Alternative Loans with Tennessee Tech University?
- What will my interest rate be?
- Are there any fees deducted from the loan before I receive my loan funds?
- Am I required to start repaying the loan while I am in school?
- How many hours must I be enrolled to receive the loan?
Because it can take up to 3–4 weeks for an Alternative Loan to be processed, we recommend you apply at least 4 weeks before the loan funds are required. Lenders automatically require a 7-day waiting period before any funds are released to the university.
Tennessee Tech Officials are prohibited from accepting any financial or other benefits in exchange for displaying lenders and loan options in FASTChoice. Prohibited activities include: receiving compensation to serve on any lender board of directors or advisory boards; accepting gifts including trips, meals, and entertainment; allowing lenders to staff our institution’s financial aid office; allowing lenders to place our institution’s name or logo on any of their products; and owning of lenders’ stock (for college officials who make financial decisions for our institution).
