There are many other ways to pay for college if federal, state or MNU aid will not cover your costs.
Alternative or Outside Loans
Consider borrowing a Private (also known as Alternative or Supplemental) loan if there is no other viable federal student loan option available. Dependent undergraduate students and their parent(s) should compare the costs and loan terms to the Federal Parent PLUS loan because often the PLUS total payout will cost less in the long run. Additionally, the PLUS loan has other provisions which are useful and beneficial to each borrower should some kind of catastrophic situation occur during repayment.
Private loan interest rate and fee schedules are primarily determined by the borrower’s and cosigner’s (if used) credit history. Borrowers can expect private loans to cost significantly more than federal loans. As a rule of thumb, having a cosigner on a private loan will help keep the costs of the private loan down. Some private loans require a cosigner.
Interest rates for private loans are variable and change often. You may find the best rates appear to be lower than the Federal Parent PLUS but keep in mind any advertised rate is temporary at best, and you must qualify for that rate based on credit worthiness. In addition, there is often origination or repayment fees added to the loan depending on credit worthiness. Please take these into account when comparing the Private loan to a Parent PLUS.
Look for private loan lenders who offer interest rates based on the LIBOR rate plus a low percentage spread, or interest rates based on the PRIME rate minus some percentage spread. Unfortunately, the best rates and the lowest origination fees are reserved for borrowers who have strong credit histories and also have a well qualified cosigner. Most borrowers do not qualify for the best rates and fees. Frequently lenders will offer a lower interest rate during in-school and grace periods and then raise the rate when the loan converts to repayment.
Private loans cannot be consolidated with Federal loans; although lenders can bill you with a single statement if you owe one or more types of loans to the same lender. It is possible to consolidate two or more private loans together into a single account.
Here is a link with information on and links to potential lenders and instructions on how to apply for Private Loans.
Finaid.org has a great comparison chart of lenders who offer private loans. The finaid.org site provides additional information about all student loans in general. We highly recommend reading the information it provides. Researching student loan lenders and their various products is the best way to potentially save thousands of dollars in fees and interest.
Cosigners of Private Alternative loans need to know the following:
- When creditors review your credit history, a cosigned loan carries the same weight on your credit history as does a Parent PLUS loan (assumes cosigner and borrower have a parent/child relationship) borrowed in your name. There is no benefit to the parent’s credit rating for cosigning a private loan vs. being the borrower of a Federal Parent PLUS.
- Private loans with outstanding balances cannot be discharged if the borrower or cosigner dies or becomes permanently and totally disabled. Under the Parent PLUS program the loan is forgiven in these types of circumstances.
- Lenders who advertise a cosigner release option are not obligated to release the cosigner. The cosigner release only happens if the borrower can meet all of the credit criteria for the loan without the cosigner.
The MNU School Code is 007032
Contact Student Financial Aid Services
Attn: Student Financial Aid Services
Campus Center Building
2030 E. College Way
Olathe, KS 66062
8 a.m. to 5 p.m., Monday through Friday
The MNU School Code is 007032