Financial Aid

Private Loans

Private education loans (also referred to as alternative loans) are available for students and parents seeking additional financing options. Private loans are non-federal loans that are in the student's or parent's name. For student borrowers a cosigner is required in most cases. Union College encourages parents to also consider the Federal Direct Parent PLUS Loan to cover any outstanding educational expenses. In general, a Direct PLUS Loan provides fixed interest rate and more flexible repayment options, as well as options for loan cancellation that are not offered by most private loan products.

If you choose to pursue a private loan, be sure to compare the costs associated with various loans before completing an application. Interest rates, fees, repayment periods, and other benefits can vary significantly among loans. While many private educational loans are available with no fees and interest rates less than 10%, other programs have fees over 5% and interest rates over 14%. These high rates can result in several thousands of dollars in additional costs.

To help you compare the various private loans, consider asking potential lenders the following questions:

Loan terms

  • What is the interest rate? Is it fixed or variable? and how is it determined?
  • How often is the interest rate adjusted?
  • How much are origination fees and how are they charged?
  • Will I be required to pay the interest while enrolled in school?
  • When does the interest rate start to accrue and will it be capitalized?


  • When does repayment start? Is there a grace period before repayment begins?
  • What is the monthly minimum payment?
  • What is the maximum repayment period?
  • Am I allowed to pay on the interest while I am in school?
  • Are there any loan repayment benefits or reductions? If so, will they remain if a future payment is late?
  • Can I defer repayment of the loan if I go to graduate school?
  • Do you apply any penalties or charges for prepayments or early payoff?

You will find more information about alternative loans here.