Alternative Loan Programs
Alternative student loans for education financing are also known as private student loans. Their purpose is to help bridge the gap between the cost of attendance and traditional financial aid resources. The terms of an alternative student loan are based on the borrower’s credit history and income. Generally, borrowers with better credit histories receive better loan terms.
Unlike federal loans, alternative student loans typically do not have borrower benefits such a grace periods, and deferment and forbearance options. Alternative student loans also have higher interest rates and fees. Therefore, students should only consider borrowing an alternative loan if federal need-based and non-need-based loans combined with other student financial aid are insufficient to pay their educational expenses. To apply for federal loans, complete the Free Application for Federal Student Aid (FAFSA).
More Information about the Advantages of Federal Loans
Guide to Private (or Alternative) Loans
Traditional Students
Some lenders provide loans primarily for traditional students. Student who are enrolled at least half time* in a program that leads to a degree or certificate are considered traditional.
*At the undergraduate level, enrollment for 12 credit hours or more each semester is considered full-time; enrollment for six to 11 credits each semester is considered half time. Exception: Five credit hours per semester is considered full-time enrollment in the Occupational Therapy Program. At the graduate level, enrollment for eight credits or more each semester is considered full-time; enrollment for four to seven credits each semester is considered half time during the academic year. During the spring/summer semester, enrollment for two credits or more is full-time; enrollment for one credit is half time. Graduate students are strongly encouraged to apply for the Federal Graduate PLUS Loan which has a fixed interest rate of 7.9%.
Non-traditional students
Some lenders provide alternative loans for non-traditional students, i.e., students who are not enrolled in a degree-seeking program, or are enrolled less-than-half time, or owe past-due balances.
The application process for most alternative student loans requires a credit check. Once the loan is approved, your lender will contact Wayne State University to request its certification. After your loan has been certified, most lenders will then send the funds to Wayne State University electronically, and the funds will be applied to your student tuition account. Note: A few lenders will send the loan funds to Wayne State University via paper check. You must endorse the check before the funds can be applied to your student account. OSFA will notify you when the check is ready for endorsement.
Please click here to review our alternative loan lender comparison chart as well as apply for an alternative loan.
Graduate and Professional Degree Students
Students pursuing a graduate or professional degree are strongly encouraged to apply for a Federal Direct Graduate PLUS Loan. The Federal Direct Graduate PLUS Loan has a fixed interest rate of 7.9%.