Alternative loans are non-federal loans offered by some lenders and state governments.

These loans have higher interest rates than Federal Stafford loans and begin accruing interest as soon as the loan is taken out.  These loans should be taken out only after Federal aid has been exhausted from the Free Application for Federal Student Aid -- www.fafsa.ed.gov [External Hyperlink]. 

Alternative loans:

-- May charge loan fees
-- Require that you have good credit or a cosigner with good credit
-- Have variable interest rates
-- Cannot be consolidated with your Federal Stafford Loans.
-- Repayment will begin after you graduate, withdraw, or drop to less than half time

To apply for an alternative loan,  students need to complete an application and a promissory note for the specific loan. Most loans require cosigners, if the student does not have a cosigner, the fees and interest will be much higher unless the student has good credit.

Click here for an optional list of alternative loan lenders.  SDSU does not and cannot recommend lenders.  You may take an alternative loan through any lender that provides these non-federal loans.

Applications for alternative loans for the lenders on the optional list are available at the SDSU Financial Aid Office and online.  Completing the application on the web is preferred, if applicable, for loan processing.

We encourage students to borrow only what they need for their educational costs, the more you borrow the higher your monthly payments will be after graduation.

Academic year loans are processed with equal disbursements in the fall and spring semester unless the student requests a loan for only one enrollment term.

*Another option is the Parent Loan (PLUS), this Federal loan is taken out by the parent on behalf of the student.  The loan fees and interest rate is lower for this type of loan than it is for an Alternative Loan.