Alternative loans are loans that are designed for students but are not guaranteed by the federal government. Alternative loans are offered directly to the student by private lenders. Just like other student loans, alternative loans must be repaid!

Most students can meet their educational costs by a combination of awarded financial aid and family resources. It is only when all resources do not meet educational costs that a student should consider an alternative loan. A student should exhaust all of their Stafford loan eligibility before considering alternative loans, since interest rates and fees are usually lower for Stafford loans.

It is the policy of the SIUC Financial Aid Office to utilize the Federal Direct Loan Program whenever possible. This includes the Federal Direct Subsidized Stafford/Ford Loan, Federal Direct Unsubsidized Stafford/Ford Loan and Federal Direct Parent Loan for Undergraduate Students (PLUS). Private/alternative loans to meet educational costs should be considered as a last resort only after these other options have been maximized.

There are circumstances, however, when the processing of private loans is reasonable. This may include students enrolled in a high cost program such as Study Abroad, Aviation Flight, or Physician Assistant, as well as out-of-state students and students who have exhausted their annual limits for the Federal loan programs. Students may also have additional educational expenses approved under Professional Judgment that may not be met with the Federal Direct/Federal Perkins loans. In some cases the parent may prefer that the loan be in the name of the student, rather than utilizing a PLUS loan.

No matter which loan programs are utilized, under no circumstances will the total financial aid received, including the private/alternative loan, exceed the student′s cost of attendance for the academic period.

If applying for an alternative loan is appropriate, the student must first choose a lender. Students may want to apply to a Lender by accessing through the link above.

Once a potential lender is chosen, the student should go to the lenders web site to complete an online application. (Paper applications are also available from the lender.) The majority of lenders will perform a quick online assessment of the likelihood of approval of the loan.

Separate applications should be processed for Fall/Spring semester alternative loans, and Summer semester alternative loans. The following loan periods should be used when completing an application:

Once an application is submitted, whether online or on paper, the lender performs a credit check, and informs the student if the loan is approved, the interest rate, and/or if a co-signer will be required. Once final approval is given, the student will be required to complete a Promissory Note for the loan.

SIUC will be notified by the lender that a loan has been approved and must be certified by Elm Resources for the lender. The Financial Aid Office will certify whether the student meets eligibility requirements and the amount the student will be eligible to borrow.

After the loan has been certified, the lender will send the alternative loan funds to SIUC by an Electronic Fund Transfer. The Financial Aid Office will make a final assessment of the students' eligibility. If the student remains eligible, the loan funds will be transferred to the SIUC Bursar's Office. Alternative loan funds will be credited to the student's SIUC account. If there is a credit balance after the loan is credited to the account, a refund check will be processed no earlier than the week before the start of the semester.