Private or Alternative Loans
The Higher Education Opportunity Act of 2008 mandated a number of significant changes to provide a significant amount of additional information to families who choose to utilize private educational loans. The regulations change the disclosure requirements for the The Truth and Lending Act for non Title IV education loans made expressly for post-secondary education expenses.
A growing number of private lenders are marketing private loans directly to students. These loan programs are set up to totally circumvent the financial aid office. Legitimate lenders should be following basic standards in their dealings with families. The Department of Education has ruled that these loans must be counted as a resource in determining a student's eligibility for federal financial aid funds. If we discover you have received one of these loans, we will have to adjust your financial aid award to incorporate this loan into your package. This would normally result in the loss of "better" aid funds (need-based grants, scholarships, and government subsidized loans). Please speak to a financial aid representative before applying for a private or alternative loan. We strongly encourage families to fully utilize all federal aid programs before turning to this source of funds.
CPCC encourages students to use the Borrowing Essentials Entrance Counseling if you are thinking of utilizing a private loan. This tool will help you understand other resources in regards to your financial aid package and how to minimize your borrowing. It will also allow you to understand your rights and responsibilities that come with borrowing a private loan.
Students who have already borrowed a private loan through CPCC are encouraged to participate in the Repayment Essentials Counseling. This will assist you with understanding the essentials of successful loan repayment.
In order to receive an alternative loan at CPCC, a student will need an approved loan application from an outside lender. Students are free to apply with any lender they choose.
If a student chooses to apply for a private or alternative loan, a student must:
- have a valid FAFSA on file;
- be enrolled at least 6 credit hours;
- meeting all Satisfactory Academic Progress guidelines;
- have completed the Alternative Loan Request Form and the Private Education Loan Applicant Self-Certification Form on file with the Financial Aid Office.
Before funds are released, all of these requirements must be met.
*Note* If a student is registered for second short session classes and does not meet the credit hour requirement until the beginning of that term, funds will not be available for use until three days prior to the first day of class.
Alternative loan refunds will be released after a student has reached the 10% point in at least 6 credit hours. Please allow up to two weeks for actual processing.
A student has the right to cancel his loan up to the 10% point of the semester. Any charges incurred with the school are the student’s responsibility. This includes tuition, fees, books, and any other applicable charges. See CPCC's Refund Policies for Curriculum Courses for more information.
When a student applies for an alternative or private education loan, it is typically awarded half for the Fall semester and half for the Spring semester. Other disbursement arrangements can be made by contacting the Financial Aid Office.
Central Piedmont Community College’s Financial Aid Office does not provide a preferred lender list. Families are free to choose any lender which best serves their needs. You should visit each potential lender's web site to fully evaluate the benefits that they offer before making a final choice of a lender for your loans.
· Students Trapped in Private Loans With No Bankruptcy Protection - The Washington Post, April 29, 2010
· Review Be Wary of Private Student Loans (August 14, 2009)
- FinAid:The Smart Student Guide to Financial Aid provides a of how these programs generally operate as well as a detailed comparison chart for the major loan programs. Their Loan Analyzer Calculator will help families compare the terms of different loan programs.
- The Greentree Gazette has compiled The Student Loan Buying Guide, a comprehensive database with information on financing options through many major lenders.
- Student Lending Analytics has released their
. The SLA guide breaks down the complexity of alternative loans through a plain English, Q&A format They have also posted a series of short articles to help guide students through the loan process .
- Surviving Student Loans and College Debt
- By careful choosing student loans, grants, and scholarships as part of your entire college financial aid package, you can avoid going into heavy debt ...