The Private Alternative Loan is designed to help students to bridge the financial gap between college costs and traditional funding sources such as federal loans, grants, and scholarships. Arrangements to borrow this type of loan are made through a bank or credit union. As part of the eligibility requirements, the borrower will generally need to pass a credit check. This is a private loan established between a student borrower and a bank or a credit union. The alternative loan is in the student's name and often requires a credit-worthy cosigner. Note: Qualifications may vary from lender to lender.
Loan funds will be applied to a student's school bill. Funds in excess of the student's bill will be returned to the student in the form of a refund. Funds received and/or your refund status can be monitored by the student on his/her's billing detailed screens in MaineStreet (under: Self Service > Student Center > Finances; select "Account Summary" in the drop down box available).
Action from you may be required if you do not wish to borrow from the Direct Federal Stafford loan program. If so, you will need to complete a UMFK Bypass Direct Loans form (for the 2020-2021 Academic Year or the 2021-2022 Academic Year) and return it to UMFK before your Alternative loan request will be processed.
You may select a lender from UMFK's Private Alternative Loan Lender List (or you may use a lender of your choice).
Note: There is no obligation for students to use a lender in UMFK's lender list. A student may apply for an alternative loan with a lender of their choice. The list is a tool for students to start their search and a way to compare different alternative loan options. Do keep in mind that if you select a lender that is not on our list, you may experience delays in receiving loan money since the school may not have a loan set up process established with this lender.
Alternative loans are variable interest rate loans. In addition, interest rates may vary from lender to lender.
You can apply for this loan on your own or with a co-borrower. If you do not have an established credit history, applying with a co-borrower can help you. Interest rates and fees are based on the credit history of you or your co-borrower.
Fees may be charged. Fees may vary from lender to lender.
If you apply for an Alternative loan, you will be notified by your lender. Your loan will either be approved or denied.
Alternative loan borrowing limits vary with each student. The yearly limit is equal to student's Cost of Attendance minus any other financial aid. In other words, an Alternative loan, when added to all financial aid received (including Stafford and Plus loans, Federal Work-study, grants and scholarships), cannot exceed the student's Cost of Attendance.
This information will be available on MaineStreet (under Student Self Service > Student Center > Finances > Accept/Decline Awards). On MaineStreet a student can view their Financial Aid Award Notice by academic year or by semester. When applying for a loan, you are applying for loan money to cover the Academic year, (i.e., two semesters), unless you are only planning to attend one semester. The borrower may accept a smaller Alternative Loan amount than the maximum eligibility amount that has been offered to the student by the school on the Award Notice. It is recommended that a student borrow only what is needed.
Loan funds will be sent to your school by your lender. Loans can be disbursed in two equal disbursements/installments, (half of the total amount each semester) or in one disbursement for the total amount. Loan funds must first be used to pay for the student's tuition, fees, room and board and other school charges.
Your lender may transfer your loan funds to your school by electronic fund transfer (EFT). This method does not require you to sign a (paper) check and your loan funds will automatically be applied to your student account (at your school). If you have questions regarding aid received (on your account) or your school bill, you may view account transactions on MaineStreet and/or call the UMFK Business Office at (207) 834-8650 or (207) 834-7605.
If the lender sends your loan disbursement by check, the UMFK Business Office will notify the student borrower for endorsement. The borrower will be instructed to return the signed check to the UMFK Business Office.
Funds are credited to the student's account when: the student is registered, the semester has begun, loan funds are available and the financial aid office can certify that the alternative loan and all financial aid the student is receiving does not exceed his/her Cost of Education.
If a credit balance remains on the student's account, as a result of the Alternative loan, the borrower will automatically receive the refund amount as a check or in cash. Any remaining loan money must be used for the student's education expenses. The disbursement process may vary from lender to lender.
To check if your Alternative Loan funds have been received and applied to your UMFK student billing account:
Note: Need help to navigate in MaineStreet? Click on the MaineStreet Information for Students page.
If an "Alternative Loan" is listed as a "Payment" on your bill in MaineStreet, then the amount posted has been received and deducted from your bill. Review the amounts for accuracy. If your UMFK bill is paid in full and any balance remains, that balance will be refunded to you. Contact the UMFK Business Office at (207) 834-8650 or (207) 834-7605 to make arrangements to pick up or have your refund mailed to you.
Loans require repayment and must be paid back. For more information contact your lender and/or go to their website. Repayment options may vary from lender to lender.
It is highly recommend for the borrower to keep copies of all paperwork received from the private lender in a file folder for future reference. It is the borrower's responsibility to keep track of any alternative loans that you may have borrowed.
A good place to begin looking for answers to these questions is with your lender or servicer. We recommend that you call your lender/servicer and/or visit their website. You may also search for this information by entering pertinent key words such as "repayment" or "deferment".
Our list of alternative loan lenders has been researched carefully and compiled based on interest rates, origination fees, Satisfactory Academic Progress requirements, payment of prior balance options, repayment terms and options, enrollment options, as well as other factors. The information that is provided in this list will be updated for the 2012-13 academic year then reviewed every two years to give the best possible alternative loan options to our students. UMFK abides by the NASFAA Code of Conduct and Statement of Ethical Principles.
Additional links and resources relating to Alternative Loans may be found under Additional Alternative Loan Resources.
