Private/Alternative Loans

Private Education Loans are available to students who are not eligible for federal financial aid or who need additional funds to meet educational expenses. The student's eligibility for a private loan is determined by the cost of attendance minus other financial aid or the annual loan maximum amount as determined by the lender.

Because alternative loans are not guaranteed by the federal government, they must be insured privately. This extra cost is passed on to the borrower in the form of higher fees and interest rates. In addition, the lender will look at a student’s credit history as well as other factors to determine whether or not they will lend the funds. A student may be denied by one lender and approved by another because of the different ways the information is interpreted.

What is the difference between Federal Direct Student Loans and a Private Loan?

Private loans are NOT the same as Federal Direct Student Loans.  If you have not yet applied for or borrowed Federal Direct Student loans, you are encouraged to explore that option before proceeding with a private loan.  This process can be initiated at

Federal Direct Stafford Loans
Private Loans
Interest Rates

Federal Direct Loans have variable-fixed interest rates, meaning that the loan's interest rate remains fixed at the rate for which the loan was received. For 2017-2018 loans, the rates as of July 1, 2017:

  • Subsidized:  4.45%
  • Unsubsidized: 4.45% (Undergraduate), 6.00% (Graduate)
  • Federal PLUS:  7.00%
Private loans could have variable interest rates, which could go higher than 18% duriung the time the student is repaying the loan.

Loans fees as of May 15, 2015: 

  • Subsidized and Unsubsidized Stafford: For loans whose first disbursement occurs on or after October 1, 2016 the fee will be 1.069%.
  • Federal Parent PLUS: For loans whose first disbursement occurs on or after October 1, 2016 the fee will be 4.276%.
While many private loans may have both origination and repayment fees, others may have no fees at all.
Borrower Benefits
Upon repayment, Federal Direct Loans offer interest rate reductions, principal reductions or other borrower benefits that can help further reduce the cost of federal student loans.  Also available are deferment, forbearance, and death and disability provisions.
Some lenders offer interest rate reductions, principal reductions or other borrower benefits that can reduce the cost of private loans.  Some private loans have postponement options for post graduate training and also have forbearance options at the discretion of the lender.  There may also be death and disability provisions.
Grace Period
Federal Direct Stafford Subsidized and Unsubsidized Loans have a six month grace period .
Many private loans offer grace periods, typically between 6-9 months.
Federal Direct Stafford loans can be consolidated into a Federal Consolidation Loan to combine and simplify monthly payments.
Private loans cannot be consolidated with Federal Direct Stafford loans.
Credit Criteria

For Federal Direct Stafford loans, borrower must have no unresolved defaults or overpayments owed on a title IV educational loan or grant.

In addition, a credit report must be authorized for Federal Parent PLUS loans.
Private loans are credit-based.  A credit report from an authorized reporting agency must show that the applicant meets the minimum FICO credit score requirement, as well as other credit criteria specific to the loan.

What is the maximum amount of funds I may be able to receive in Federal Direct Student Loans?

Listed below are the annual and total aggregate limits for the Stafford loan program.

  Base Stafford

Additional Unsub*

Total Combined

Freshman (0-29 hrs)
$2,000 / $6,000
$5,500 / $9,500
Sophomore (30-59 hrs)
$2,000 / $6,000
$6,500 / $10,500
Junior (60-89 hrs)
$2,000 / $7,000
$7,500 / $12,500
Senior (90+ hrs)
$2,000 / $7,000
$7,500 / $12,500
Second Bachelors
$2,000 / $7,000
$7,500 / $12,500
Teacher Certification

*Independent students include dependent students whose parents were denied a Parent PLUS loan.
**Graduate students are no longer eligible for Subsidized loans as of July 1, 2012.

Dependent Undergraduate, Second Bachelor, or Teacher Certification

$31,000 - only $23,000 of this may be subsidized

Independent Undergraduate, Second Bachelor, or Teacher Certification

$57,500 - only $23,000 of this may be subsidized

Graduate or Professional*

$138,500 - only $65,500 of this may be subsidized

*Graduate limit includes Stafford loans received as an undergraduate

Who needs a private loan?

Private loans are not for everyone.  They are expensive and should only be considered when all other resources (such as Federal Direct Stafford – Subsidized, Unsubsidized or PLUS loans) have been exhausted.

For example, a freshman dependent student can borrow up to $5,500 under the Federal Direct Stafford Loan Program.  If this student is not eligible for grants or other aid and cannot make up the cost of attendance through working, there may not be enough funds available to cover tuition/fees, room/board and books.  If no other resources are available, the student may need to consider a Private Loan.

What are the eligibility requirements for private loans?

Requirements vary according to the lender however some common requirements may state that loan applicants must be:

  • Enrolled in a degree seeking program
  • Enrolled at least part time
  • Credit worthy borrowers or borrowers with credit worthy cosigners
  • US citizens, permanent residents or eligible non citizens
  • Making Satisfactory Academic Progress

What should be determined before deciding on a private loan?

  • What is the interest rate and on what is the interest rate based?
  • When does repayment begin?
  • Can principal and interest be deferred?
  • When is the interest capitalized?
  • What fees are associated with the loan?
  • Can payment be made through electronic transfer?
  • Is Satisfactory Academic Progress required?
  • In how many hours do I need to enroll to receive the loan?
  • Are there interest rate reductions or other incentives for borrowers who make their payments on time?

How do I select a private loan lender?

ESU is providing a list of lenders from whom prior ESU students have received private loan funding over the last few years.  These lenders:

  • Are unaffiliated with each other and are willing to make private loans to ESU students subject to the student’s credit worthiness. 
  • Have a proven history of expedient service and charge fees and interest rates commensurate with others in the industry. 
  • Have NOT offered financial or other incentives to ESU in exchange for inclusion on the list

When visiting the link shown below, you will see a list of private loan lenders that have been used by Emporia State University students in the past.  You are encouraged to research private loan lenders and select the one that best fits your needs.  This is not an exclusive list and you are not required to borrow from a lender on this list.  ESU will not deny or delay processing a student’s request for a private loan if the student’s chosen lender is not on this lender list.  We recommend you not complete a loan application until you have decided on a lender.  You will be notified if ESU is unable to certify the loan you selected or if you have already reached your maximum eligibility.  The following information is accurate as of April 1, 2013.  Program requirements and other elements of private loan programs may frequently change.  This comparison chart is intended to be a guide.  For the most accurate and current information, please contact your lender.  If you have not yet borrowed Federal Direct Stafford or Federal Direct PLUS loans, you are encourage to explore those options before proceeding with a private loan.  If you have questions about your federal loan eligibility, please contact ESU’s Office of Student Financial Aid.




ESU’s Office of Student Financial Aid is providing the above information as a courtesy.  Outside of maintaining the OSFA website, ESU does not promote, validate, or maintain the websites listed.  URL addresses and website contents frequently change.  The URL addresses listed were accessible as of May 16, 2016.  A website appearing here does not necessarily imply that ESU agrees with the material contained on or linked to the websites.