Alternative loans, commonly referred to as private loans, are commercial loans offered by banks and other private lenders to cover the costs of college beyond financial aid.
We strongly encourage students to explore all funding options—scholarships, grants, work study and federal loans—prior to applying for a private loan.
How they differ from federal loans:
- These loans are not guaranteed. Both the student and co-signer (if needed) will be subject to a credit check.
- Interest rates on these loans may be higher than the federal rate. There are several places to find the current rates for Prime, T-bill, LIBOR and the other instruments that lenders use to set their interest rates, but we suggest you bookmark www.bankrate.com. When you visit, there will be many indexes listed. The three main indexes for private loans are: Wall Street Journal (WSJ) Prime, 91Day T-bill, and the one-month LIBOR plus a certain percent.
- There are no interest rate caps on these private loans, unlike federal loans. While alternative loans typically defer payments while you are in school and offer a grace period afterwards, interest continues to accrue during these time periods. Make sure to read and understand loan conditions and terms prior to signing the promissory note.
While it may be difficult to come up with the extra funds, making alternative loan payments whenever you can will be helpful in reducing the overall costs that you will pay when you enter repayment.
If you determine that an alternative loan option is the right choice for you, we encourage you to explore the loan programs to find the one that best suits your needs.
Self Certification Form
As part of the alternative loan application process, you will need to complete a Self-Certification form. This form must be completed in order for your loan to be approved. All Self-Certification forms should be sent to your specific lender and not the Office of Student Financial Planning. The Self-Certification form requires you to report your cost of attendance and estimated financial assistance. You may contact the Office of Student Financial Planning at 802.485.2015 to obtain this information. Most lenders recommend that you use the form they provide, and will provide you with a copy of this form.
This form is also available at the Office of Student Financial Planning.
Active Acceptance of the Loan
Upon approval of your alternative loan, you will be required to “actively accept” the terms of the loan before the lender can notify the school that school certification is required. The terms of the loan will be provided to you in a Loan Approval Disclosure. The lender’s instructions for how to “accept” the loan terms can be found on the private loan approval disclosure form. We recommend that you return this form to your lender as soon as possible. Be sure to apply several weeks before funding is needed, in order to ensure timely processing.
Norwich University is committed to providing students with the best possible information in order to assist in the selection of a lender. Lenders we recommend are only suggestions. Students are not required to choose one of these lenders. If a student wishes to choose an alternative loan with any other lender, we will process that loan. Norwich University does not receive any monetary or other incentives for having these lenders on our list. The lenders that we suggest are there because they met the following criteria at the time we created this list:
- The lender offers benefits to students in the form of fee reductions, interest rate reductions, or other benefits.
- The lender has demonstrated over time that they provide excellent customer service to students.
- The lender participates in electronic processing as well as paper processing, making it easy for the student to apply for and receive their loan funds.
|Discover Student Loans||www.discoverstudentloans.com||1.877.728.3030|
|Sun Trust Bank||www.suntrusteducation.com/customchoice||1.866.232.3889|
|Vermont Student Assistance (VSAC)||www.vsac.org||1.800.798.8722|
Alternative Loan Comparison Tool
Norwich University is providing a tool called FASTChoice Solutions if assistance is needed in selecting a lender for an alternative loan. This tool is provided by Great Lakes Higher Education Assistance Corporation (GLHEAC) to assist NU students in selecting a lender and provide the ability to compare the benefits and terms of each loan program to assist students in making the best choice.