Alternative Loans

This page is dedicated to Hobart and William Smith Colleges' preferred lender list for private education loans. Borrowers who are interested in obtaining private education loans may qualify for federal student loans and/or other assistance under Title IV of the Higher Education Act and should apply for such federal aid before applying for a private education loan. (Links to these federal programs can be found to the right and left of this page.) The terms and conditions of loans made, insured, or guaranteed under Title IV of the Higher Education Act may be more favorable than the provisions of private education loans.

Private education loans are not subsidized by the federal government. Eligibility for a private education loan is determined by the lender based on the creditworthiness of the student borrower and/or co-borrower. These loans are to be used for education related expenses only and should supplement, not replace, federal student loans and federal aid programs. The amount of a private education loan is limited to the cost of attendance less any other aid received, including federal and state grants, loans, and scholarships.

Alternative loans...

  • Require credit approval
  • Have variable interest rates
  • May have additional fees of up to 9.5% of the requested loan amount
  • May be deferred
  • Often allow a 6-month grace period before students begin repaying
  • Must be accounted for in the student's aid package

Before pursuing an alternative loan, we recommend that you compare its features to the PLUS loan (and state educational loans for residents of select states). To see a comparison of the PLUS loan and the alternative loan, please click here. Bear in mind that the Direct PLUS loan interest rate is 7.9%.

General Alternative Loan Provisions:

Borrowers: The loan is in the student's name. However, for most loan programs, undergraduates will need a cosigner. Some loans have a cosigner release option after a certain number of on-time monthly payments, typically 24 to 48.

Eligibility Requirements: Applicant must be 18 years of age; a U.S. citizen or eligible non-citizen; enrolled at least half-time in a degree program; credit worthy or apply with a credit worthy cosigner.

Loan Amounts: The maximum amount students may borrow is the school's cost of attendance less other financial aid. Lenders usually have a minimum loan amount of $500 or $1,000.

Interest Rate: Alternative loans usually have variable interest rates which are based on an index such as LIBOR or PRIME plus an additional percentage depending on the applicant's and cosigner's credit score. For example, a loan program's interest rates may range from Prime plus 1% to Prime plus 5%. The highest credit score would receive Prime plus 1% and the lowest approved credit score would receive Prime plus 5%.

Repayment Terms:

Payment periods typically range up to 15 or 20 years depending on the amount borrowed. Some loans allow a longer period. Repayment options generally include immediate repayment of principle and interest, interest-only payments during enrollment, or deferred principal and interest payments during enrollment.

Lender Selection Criteria

The Hobart and William Smith Colleges Request For Information (RFI) procedure consists of using the New York State HESC RFI Generator and e-mailing it out to eight lenders which were selected by the HWS Assistant Director based on availability in NYS, participation in NYSFAAA and past lender/school meetings. Three additional lenders approached us for the opportunity to submit RFIs and those were granted. The 60+ question RFI covers topics such as interest rates, customer service, products, repayment options, electronic processing, fees, benefits and other questions regarding loan availability and communication. When reviewing the responses, 8 parameters were reviewed and given scores ranging from 1-5, with 5 being the highest. These parameters include interest rates, customer service, product availability, repayment options, electronic processing, front end fees, reputation and benefits.

We also considered the stability of the lenders and the flexibility of the loan programs to meet student needs. We believe the lenders selected have a history of demonstrating their commitment to offering students and families the best private loan options.

Application Procedures:

For most alternative loan programs, students must annually complete an application for each academic year. The loan application may be completed on-line at the lender's web site.

The first step is to choose an alternative loan which will meet the family's and student's needs.To assist in your effort to determine how much you should borrow, we encourage you to use the following calculators:


Preferred Lender List

You may borrow from any lender you choose, including others not listed here. We recommend that you thoroughly investigate multiple student loan lenders as the loan terms and conditions may vary. The loan application is completed directly through the lender of your choice, most often on their web site. Upon credit approval the lender will send your loan request to Hobart and William Smith Colleges for certification of eligibility. We recommend you review the Private Education Loan Checklist before making a borrowing decision. Hobart and William Smith's preferred lender list can be found here.