Types of Alternative Loans

Types of Alternative Loans


You will not have to start repaying your federal student loans until you graduate, leave school, or change your enrollment status to less than half-time.

The interest rate is fixed and is often lower than private loans—and much lower than some credit card interest rates. View the current interest rates on federal student loans.

Undergraduate students with financial need will likely qualify for a subsidized loan where the government pays the interest while you are in school on at least a half-time basis.

You don’t need to get a credit check for most federal student loans (except for PLUS loans). Federal student loans can help you establish a good credit record.

You won’t need a cosigner to get a federal student loan in most cases.

Interest may be tax deductible.

Loans can be consolidated into a Direct Consolidation Loan.  Learn about your consolidation options.

If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments.

There are several repayment plans, including an option to tie your monthly payment to your income.

There is no prepayment penalty fee.

You may be eligible to have some portion of your loans forgiven if you work in public service. Learn about our loan forgiveness programs.

Free help is available at 1-800-4-FED-AID and on our websites.


Many private student loans require payments while you are still in school.

Private student loans can have variable interest rates, some greater than 18%. A variable rate may substantially increase the total amount you repay.

Private student loans are not subsidized. No one pays the interest on your loan but you.

Private student loans may require an established credit record. The cost of a private student loan will depend on your credit score and other factors.

You may need a cosigner.

Interest may not be tax deductible.

Private student loans cannot be consolidated into a Direct Consolidation Loan.

Private student loans may not offer forbearance or deferment options.

You should check with your lender to find out about your repayment options.

You need to make sure there are no prepayment penalty fees.

It is unlikely that your lender will offer a loan forgiveness program.

The Consumer Financial Protection Bureau's private student loan ombudsman may be able to assist you if you have concerns about your private student loan.


Click here to view a list of private loan options.

Under federal law, students applying for a private education loan will be provided a series of disclosures by their lender and will be required to complete the Private Education Loan Applicant Self-Certification Form. Students will need their cost of attendance and financial aid amounts to complete the Self-Certification Form.  These requirements extend the amount of processing time students should expect when borrowing private loans to fund their education.  It is very important that students and families plan accordingly.

The loans listed on Framingham State University's web site were selected in response to a request by the Financial Aid Office to the education lending community to provide information about their loan programs.  The Financial Aid Office has listed the programs based on competitive interest rates, borrower benefits, and customer service history.  You are not obligated to choose your loan only from those lenders listed above.