Alternative Loans
What is an alternative loan?
An alternative loan is a credit-based loan for students who need educational funding beyond the federal loan(s) awarded in their financial aid award package.
Unlike certain federal loans, alternative loans accrue interest while the student is enrolled in college, although repayment of principal and interest may be deferred until after graduation.
Calvin students should avoid lenders that do not require Calvin certification of their loan application and, in general, should be suspicious of unsolicited loan offers. The Michigan Student Financial Aid Association cautions students that "loan debt can accumulate quickly and result in a lifetime burden of high payments and credit denials for automobile purchases, credit cards, and home mortgages. Private loans also can reduce eligibility for more desirable federal, state and college aid programs. To avoid these problems, read and understand the terms and conditions of all loans."
When do I apply for alternative loans?
You should first apply for federal loans using the FAFSA before applying for alternative loans.
June or July: Research alternative loan options after you receive a financial aid package and notice of outside scholarships and grants and after you establish a budget for the coming year based on summer earnings and other family contributions.
August: You can apply for an alternative loan after receiving your first billing statement from Calvin (usually in August). Students usually take out one alternative loan for the coming year.
September or December: Calvin loan disbursements are scheduled in early September for the fall semester and early December for the spring semester. If these dates have passed, disbursement is usually received within 2-5 business days after school certification.
Commonly used loan date ranges:
- Full year loan: 9/08/09 - 5/19/10
- Fall semester only: 9/08/09 - 12/18/09
- Spring Semester only: 2/01/10 - 5/19/10
Most loan funds arrive at Calvin by Electronic Funds Transfer (EFT); students are notified by email when this occurs.
Which alternative loan should I choose?
While Calvin does not endorse any particular alternative loan program, the options most often chosen by Calvin students appear on our alternative loan table. These loans are popular because of the interest rates and features they offer.
The alternative loan preferred lender list was developed by Calvin College financial aid professionals. Lenders are reviewed on an annual basis and are asked to provide Calvin College with up-to-date information regarding benefits and services. The Calvin College financial aid office adheres to the code of conduct as established by the Higher Education Opportunity Act.
Most alternative loans require a co-signer (parent, grandparent, or legal guardian with established credit history) to reduce interest rates and fees and save money over the life of the loan.
Students are not required to choose a loan from the preferred lenders list. If a student or parent believes that they have found an alternative loan that better serves their specific needs, they may apply for that loan and Calvin will process the paperwork according to the standards set by the code of conduct.
To help make your decision you may want to ask these questions.
How much should I borrow?
You should only borrow the amount needed for the coming year after subtracting other financial aid, outside scholarships and grants, projected student earnings, and other family contributions. You can wait to apply for alternative loans until after receiving the first fall billing statement in August or the first spring billing statement in December.
You should first apply for federal loans using the FAFSA before applying for alternative loans.
When should I start paying alternative loans?
Unless you have requested deferment during the application process, repayment usually begins 60 days after the first disbursement of loan funds.
If possible, you should consider making regular monthly payments or interest-only payments on your alternative loan. This will result in substantial savings over the life of your loan.
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