Alternative Non-Federal Educational Loans

General Information
Alternative educational loans are designed to assist students and their families who either are not eligible for federal loans, or who need additional educational financing and have for some reason decided not to pursue a Federal Parent PLUS Loan. Loan approval is generally based on creditworthiness and ability to repay. Alternative loans are available to students who are enrolled and pursuing a degree program at Tulane University . As with any loan, careful consideration should be made in determining amounts to be borrowed, as the loan must be repaid. Alternative loans may be an option for international students who are not eligible to apply for federal loans but who have access to a creditworthy U.S. citizen or permanent resident cosigner. If the student is a dependent and eligible for federal loans, a parent should always consider the Federal Parent PLUS Loan first since this loan may be a better option for financing.

Only borrow what you need, try to limit your level of borrowing.

Avoid deceptive student loan offers. Information regarding this may be found here.

Applying for an Alternative Loan
To apply for an Alternative loan, students or parents must complete and submit a loan application to a participating lender. Most lenders offer a "pre-approval" process to students and parents. Students and parents can complete an application online or provide their information over the phone. Students and parents must provide the lender with the loan amount requested and the loan period when completing a loan application. Tulane encourages students and/or parents to apply for an Alternative loan by July 1 in order to ensure that the funding arrives before the fall semester begins.

The yearly limit on an Alternative loan is equal to a student's cost of attendance (including tuition and fees, and an allowance for room, board, books, travel and miscellaneous) minus any financial aid the student is already receiving.

Once the loan is approved by the lender, the lender will send Tulane a request for school certification. School certification is the process by which Tulane verifies whether the student is eligible to receive the requested loan amount during the specified loan period. Financial Aid Counselors begin the certification process after July 1. Loan borrowers will be notified by mail that the loan certification has been completed. Loan borrowers who have not received notification of certification by August 15, please contact our office at (800) 335-3210 or (504) 865-5723. Tulane will only certify Alternative loans that are first approved for credit by the lender.

• What is my interest rate?

• Are there any origination or repayment fees on my Alternative loan?

• Can principal and interest be deferred while the student is in school?

• Will a co-signer be required on my loan? Will my interest rate go down if I can obtain a co-signer? Is their a co-signer release option?

• Do I need to be enrolled at least half time to apply? Some lenders require you enroll for at least 6 credit hours (half-time) to borrow the loan.

• Does an annual minimum or maximum borrowing amount exist? Note: the maximum Tulane will certify in an Alternative loan is costs of attendance minus other financial aid.

• What is my repayment period? How long do I have to repay?

• Can I defer the loan if I attend graduate school/law school/medical school?

• Can I use this loan to cover a prior balance? If yes, for up to how long?

• What benefits are offered on the loan? Please note that while benefits may be offered, they are generally not guaranteed by lenders or part of the promissory note.

Since the Alternative loans are based on creditworthiness (a credit report is pulled and reviewed by the lender) the lender will determine the interest rate/fees. Lenders will base their interest rates on either a prime rate or libor rate. The differences between these rates are:

Prime Rate: The prime rate is defined by The Wall Street Journal (WSJ) as "The base rate on corporate loans posted by at least 75% of the nation's 30 largest banks." It is not the 'best' rate offered by banks. The WSJ is used as the official source of the prime rate. Many (if not most) lenders specify this as their source of this index. The prime rate does not change at regular intervals. It changes only when the nation's "largest banks" decide on the need to raise, or lower, their "base rate." The prime rate may not change for years, but it has also changed several times in a single year.

Libor Rate: The Fannie Mae LIBOR rates are determined from information that is available as of 11:00 a.m. (London Time) on the second to last business day of each month. Fannie Mae makes these rates available by the last business day of each month. LIBOR is an abbreviation for " London Interbank Offered Rate," and is the interest rate offered by a specific group of London banks for U.S. dollar deposits of a stated maturity. LIBOR is used as a base index for setting rates of some adjustable rate financial instruments, including Adjustable Rate Mortgages (ARMs).

The following is a list of Tulane's Alternative streamlined lenders. Choosing one of these lenders will allow us to process the Alternative loan electronically and receive the funds via electronic funds transfer (EFT). However, students and parents may select another lender (see note below).

Students and Parents are encouraged to view each lenders website and review the terms and benefits offered. You should apply directly with the lender. Most lenders will allow you to e-sign your application/promissory note online.

How We Choose Our Lender List
As a service to our student and parent educational loan borrowers, Tulane's University Financial Aid Offices have attempted to identify a list of lending institutions who we believe offer quality customer service and benefits with their respective federal and/or non-federal loan products.

The composition of our list of suggested lenders is the result of our annual "request for proposals" (a/k/a "RFP") process, whereby interested lenders submit proposals for our consideration. The main criteria we expect from lenders include all of the following:

reliable customer service (including service during processing and repayment);
competitive loan products (including competitive fees and interest rates);
electronic disbursement of funds;
allowance for borrower electronic repayment of loan funds; and
cost saving benefits to borrowers throughout the life a loan.

The Tulane "Loan Committee" thoroughly reviews and researches each proposal received each year before finalizing a list of lenders meeting the aforementioned criteria. We want to assure all educational loan borrowers that Tulane's University Financial Aid Offices do not receive any form of payment or remuneration from lenders in exchange for inclusion on our lender listing. As long time members of the National Association of Student Financial Aid Administrators (NASFAA), the employees of Tulane's University Financial Aid Offices fully adhere to NASFAA's Statement of Ethical Principles and Code of Conduct for Institutional Financial Aid Professionals.

Please know there is absolutely no obligation for borrowers to select a lender from our lender listing. Student and/or parent borrowers have the right to select a lender of their choice. Per federal and institutional guidelines, the University Financial Aid Offices will process any loan from any lender.

Finally, we wish to point out that our list of lenders is not in any order of preference.

We recommend that a borrower's lender choice be carefully chosen as to what is best for the borrower and with the intent that one will remain with the same lender throughout one's studies at Tulane.

The Tulane University Financial Aid Offices remain committed to the students we serve. As such, we will continue to annually review our suggested lenders to ensure that our students and their families receive reasonable rates and good customer service.

Other Lenders - Families who would like to choose another lender should request an application/promissory note directly from the lender. Students/Parents must send a copy of their Promissory Note to Tulane. The note must include the lender's name, code, address and guarantor's name. In addition, please provide a letter indicating the dollar amount and loan period for the Alternative loan. Tulane will send certification to the lender either by ELM (if the lender is a participant), by fax, or by mail.

Receiving the Alternative Loan
Alternative loan lenders belonging to the ELM Resources' alliance of lenders disburse loan funds electronically to Tulane. When the specified loan period is the entire academic year, the loan funds are disbursed in August and in January. When the specified loan period is one semester out of the academic year, the funds are disbursed in one disbursement - three days prior to the beginning of the semester, or when the loan has been approved and disbursed by the lender, whichever is later.

Other lenders (who do not participate in ELM Resources' alliance of lenders) may disburse loan funds via paper check to the university. If so, the funds are disbursed in two installments by means of co-payable check. The check is sent to the Tulane Bursar's Office. Once the Bursar's Office confirms the student's registration, the Bursar will sign the check for Tulane and contact the borrower to sign the check before posting the funds to the student.

Loan Tracking Information
Students/Parents interested in verifying their student loan account balances can use the following online resource:

Lenders interested in being a part of Tulane's streamlined process should contact Jennifer M. McNeel, our lender liaison at jmcneel@tulane.edu Tulane reviews RFP information annually every December.