Alternative loans, also called private or supplemental loans, are made available by lenders to students who need additional funding to help with their educational costs.
Consider Federal Financial Aid First
When May an Alternative (Private) Student Loan Be A Good Option For Me?
Important Items to Consider
Processing Steps
Consider Federal Financial Aid First
The Office of Financial Support and Scholarships at UNO does not require the completion of the Free Application for Federal Student Aid (FAFSA) but strongly encourages students to complete a FAFSA in order to apply for and maximize eligibility in Federal and State financial assistance prior to applying for an alternative (private) loan. A FAFSA may be completed online.
Filing a FAFSA will determine your eligibility for grants (assistance that does not have to be repaid) and other need-based aid, such as Federal Direct Subsidized Loans (available to undergraduate students, interest is paid by the government while you are enrolled in school at least half-time and during deferment periods). Regardless of the demonstrated financial need on your FAFSA, you may be eligible for a Federal Direct Unsubsidized Loan (interest accrues while you are attending school).
If you are a dependent student or graduate student and need additional funding to meet college costs after your eligibility for federal grants and federal loans have been considered, it is important to consider the differences between Direct PLUS loans and alternative (private) student loans.
Federal student loans include many benefits (such as fixed interest rates and income-based repayment plans) not typically offered with private loans. In contrast, private loans are generally more expensive than federal student loans.
Comparing Federal and Alternative (Private) Student Loans (PDF)
Federal Student Loans | Alternative (Private) Student Loans |
The interest rate is fixed over the life of the loan and is often lower than private loans. View current interest rates on federal student loans. | Interest rates may be fixed or variable and vary based on credit score and other criteria. Interest rates can vary greatly. High interest rates cost more in the long run. |
Undergraduate students with financial need will likely qualify for a subsidized loan where the government pays the interest while you are in school on at least a half-time basis. | Alternative (private) student loans are not subsidized. No one pays the interest on your loan but you. Interest accrues on the loan starting the day of disbursem*nt and accrued interest will capitalize on the principal amount of the loan during repayment. |
No qualifications based on creditworthiness and no cosigner required. | A credit check is required and a cosigner may be required to gain approval or obtain a lower interest rate. |
If you are having trouble making payments, you may be able to temporarily postpone payments through deferments and forbearances or lower your payments using income-driven repayment plans. | Alternative (private) student loans do not offer these same protections. Contact your alternative (private) loan lender to discuss repayment options. |
Federal student loans can be consolidated together into a Direct Consolidation Loan during repayment. | Alternative (private) loans cannot be consolidated with federal student loans. |
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When May An Alternative (Private) Student Loan Be A Good Option For Me?
An alternative (private) student loan may be a good option for you to consider if:
- You are not eligible to borrow Title IV federal loans. You may still qualify for an alternative (private) loan because eligibility is determined by lender underwriting criteria.
Examples include:- You are enrolled or planning to enroll less than half-time (6 credit hours for undergraduate students, 5 credit hours for graduate students);
- You did not or will not complete financial aid to-do list requirements;
- You have reached the Federal Direct Loan aggregate borrowing limits;
- You are a non-degree seeking student or only enrolled in a certificate program;
- Not meeting UNO's Satisfactory Academic Progress policy
- You have applied for the maximum amount of all Federal loans available to you (annual limits apply) and there is a difference between the cost of attendance and total financial aid received.
- You owe a past due balance from a previous semester. Some alternative (private) loan lenders allow loans to be certified for prior terms.
- You are an international student with limited borrowing options. Certain lenders allow non-eligible noncitizens to apply for their loan products. Lenders that originate student loans for international student private loan applicants typically require a U.S. based co-signer as part of the application process.
- You understand and have compared the terms of the Federal Direct PLUS Loan program (for dependent undergraduate students and graduate/professional students) to the terms of a private loan offered to you, and have determined that the alternative (private) loan is a better choice for you and the borrower (if considering a "parent" alternative loan).
- You, the student, refuse to complete a FAFSA.
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Important Items to Consider
If you decide to borrow an alternative (private) loan, it is important to realize that you have made a decision that will impact your life after graduation. You should consider a number of factors:
- Have you considered all eligibility for federal financial aid? Contact our office with any questions you have.
- Consider developing a budget and debt management resources that might help you better manage your resources. Can you make any changes to your lifestyle needs and current obligations to free up additional funds for loan repayment?
- What other loans or obligations do you already have or are likely to take on in the near future? How much of your future income is already committed to repaying these obligations?
- How much will your payments be? What options do you have to manage repayment?
- What are your lifestyle needs after graduation?
- After considering your lifestyle needs and current obligations, can you afford to borrow from an alternative loan lender?
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Selecting an Alternative (Private) Loan Lender & Historical Lender List
When selecting an alternative (private) loan lender, be sure to ask any questions you have. Terms and conditions of alternative (private) student loans vary according to each lender. Look for differences in interest rates, fees, credit check and co-signer requirements, and terms of repayment.
UNO has compiled a list of all alternative (private) student loan lenders used by UNO students since the 2019-2020 academic year. This allows you to see a list of lenders that students have used in the past to assist in meeting educational costs. UNO does not recommend any lender and you may choose any lender, including lenders not on the historical lender list. You may research the Internet, a bank, or a credit union for student loan options. Inclusion or exclusion of a lender on this list does not constitute an endorsem*nt or recommendation by the University of Nebraska at Omaha.
UNO Historical Lender List
We encourage students to only borrow what they need for their educational costs. Remember that the more you borrow the higher your monthly payment will be which could affect your financial well-being after graduation.
Finally, please keep in mind that this is a loan that will need to be paid back. Failure to obtain all relevant information now may lead to repayment problems down the road.
As part of the alternative loan application process, you must submit a Private Student Loan Applicant Self-Certification (PDF) to your lender.
To determine your cost of attendance, visit the Tools and Resources page.
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Processing Steps
Step 1: Application Process with the Alternative (Private) Student Loan Lender
Be sure to contact your lender with any questions during the application process. You may be required to submit documentation as part of your application. As applicants of alternative (private) loans are subject to a credit check, the lender will let you know the outcome of the credit check and if a co-signer is necessary in order to approve the application, as well as inform you of any required documentation that needs submitted.
Step 2: School Certification
Once the application has been provisionally approved by the lender, your application will need to be certified by UNO. We receive most alternative (private) loan certifications electronically. We will certify your eligibility for the alternative loan based on UNO and individual lender guidelines. UNO will verify your cost of attendance, that your loan dollar amount requested is acceptable within the cost of attendance, loan period, grade level, product eligibility, and other eligibility criteria. If there are eligibility issues, your loan may be reduced or cancelled in order to comply with lender and UNO guidelines.
Once the alternative (private) loan application has been certified by UNO, it will be returned to the lender.
Step 3: Right-To-Cancel Period
The lender will process the school certification and send you required alternative loan disclosure statements, which will include a disclosure showing the total loan amount and a document explaining your right to cancel the loan prior to funds being sent to us.
Once the right to cancel period is over, the loan will be disbursed to UNO and credited to your student account for the loan period(s) certified. The right to cancel period is required to be a minimum of at least three (3) days, but many lenders have longer right to cancel periods.
Step 4: Loan Disbursem*nt
We usually receive alternative (private) loan disbursem*nts approximately ten (10) business days after the loan is certified. Once UNO receives the funds from your lender, your student account will be credited with the alternative (private) loan disbursem*nt based on the loan period certified.
Unless authorization is on file, once the tuition, fees, and housing and food posted on your student account is paid, any credit balance for that term will be issued as a paper check or direct deposit if elected through the Cashiering/Student Accounts Office.
