Alternative Loan Programs
Alternative loans are often referred to as private, commercial or supplemental loans because they are not guaranteed by the federal government. Application requirements and repayment options are different from the traditional Federal student loan program. The alternative loan programs vary among themselves as well. Most lenders use the London Interbnk Offered Rate (LIBOR), 90-Day Treasury Bill Rate or the Prime Rate (usually plus a small percentage, i.e. 2.5%). These loans are contingent on a student's credit worthiness. To insure that your application is favorably reviewed, you should make every effort to reduce or eliminate consumer debt. Individual lenders set criteria and rates according to their own policies independent of the School of Law. It is important to maintain your credit rating prior to and during your law school tenure. All alternative loan programs require a credit check and/or an income-to-debt ratio check on either the borrower, co-signer or both.
Bad credit usually implies having made late payments (more than 30 days) on credit cards, medical bills, telephone bills, rent or other types of credit. Defaults, collection action, write-offs or bankruptcy also indicate bad credit.
Since mistakes are sometimes made, we strongly recommend that you contact one of the following three national credit agencies to receive a copy of your credit report in advance of applying for private loans. The usual fee is about $8 plus tax. It is free if you have been denied credit within the past 60 days and free or reduced for residents of Colorado, Georgia, Massachusetts, Maryland, New Jersey and Vermont.
- Experian
1-888-EXPERIA (397-3742) - Trans-Union
1-800-888-4213 - CBI / Equifax
1-800-997-2493
In some circumstances, the inability to borrow private loans due to negative credit will seriously affect your ability to finance your legal education. The law school does not have a loan program for students who cannot obtain private loans.
The major law specific alternative loan lenders which also offer Bar Loans for post graduate study while studying for the bar exam. These lenders also provide Federal loans. You may apply online at each respective web site or contact the lender directly.