Students seeking a degree at Howard University should always pursue all types of financial aid including federal grants and loans, scholarships, and work study before seeking a private/alternative loan. Parents of dependent undergraduate students should also consider applying for a Parent PLUS loan before the student applies for a private/alternative loan. Graduate students should consider applying for the Graduate PLUS Loan before seeking a private/alternative loan.
The advantages of receiving Federal Direct Student Loans include:
* Students will not be required to pay back Federal Direct Student Loans until six months after graduation or stop attending school at least half-time. For private/alternative loans, a student may have to start repayments immediately.
* Federal Direct Student Loans offer lower interest rates than private/alternative loans.
* For Federal Direct Subsidized Loans, the government pays the interest on the loan while the student is attending school at least half-time.
* Parent PLUS Loans require a credit check but the criteria are less strict than for private/alternative loans. Also, the parent can choose to not begin repayment until the student graduates, drops below half-time enrollment status.
Students that are ineligible for Federal Direct Loans or need additional funds beyond their qualification for federal student aid may apply for a private/alternative loan. Please note that a Free Application for Federal Student Aid (FAFSA) is not required in order to apply for an alternative loan but is encouraged to consider all other aid before applying for a private/alternative loan.
A student interested in a private/alternative loan should apply through a private lender which can require a co-signer. Please note that each lender may have different interest rates requirements, and/or repayment options. Students can be eligible to receive a private/alternative loan up to the amount of their Cost of Attendance, determined by the Financial Aid Office, minus other aid received. A private/alternative loan cannot exceed the student’ Cost of Attendance for the aid year.
The Truth In Lending Act (TILA) and the Higher Education Act of 1965, as amended (HEA), require a lender to obtain a self-certification signed by the private loan applicant before disbursing a private education loan. The lender may provide the applicant the self-certification form; however, you can also obtain the form by clicking on this link, Private Education Loan Applicant Self-Certification Form.