Private loans, called alternative loans, are borrowed to meet any gap that remains between the cost of education and the financial aid a student has been awarded. Because private loans are the most costly type of educational financing, a private loan should be considered only after a student has applied for school-based aid, federal loans and exhausted the possibility of receiving help from their family.
Private loans are not-need based. Approval is based on the applicant's credit worthiness as defined by each lender. The amount a lender will approve is based on the cost of education and other financial aid awarded as certified by the Cummings School on the private loan application.
Unlike the federal Subsidized Stafford Loan, there is no interest subsidy for private loans. The borrower may be responsible for the payment of interest from the time the loan is disbursed, although most programs allow the borrower to postpone payment of principal and interest while in school. The unpaid interest is added to the principal loan balance at repayment.
Application Advisory: Students are advised not to apply for any private or alternative loan without first consulting the Financial Aid Office to help them determine their best option.