Private (Alternative) Student Loans

Students who need additional funds beyond what they qualify for in federal student aid (including Federal Direct Loans) or federal aid options have been exhausted may wish to apply for a private (alternative) education loan. Students should exhaust federal loan options first before considering a private loan.

If you determine that you need a private education loan to help pay for your education expenses, you should carefully research and compare the options available from different lenders and select the lender that best suits your needs.

Generally a private education loan will not be certified for any student who has remaining federal student loan eligibility (Perkins, Subsidized, Unsubsidized or Graduate PLUS). For more information about private education loans or to set up a time to meet with a financial aid counselor, please call the Office of Student Financial Aid at (423)425-4677.

What is a Private (Alternative) Education Loan?

A Private Education loan is a non-federal education loan, through a private lender typically issued in the student's name and requiring a cosigner. Generally, alternative loans have interest rates, repayment terms, and deferment options that are substantially less favorable than those of the Direct Stafford, Perkins, Parent PLUS and Graduate/Professional PLUS Loan programs. Each lender has their individual eligibility requirements, interest rates, repayment terms and conditions. For example, some lenders require students to be enrolled at least half-time in a degree-granting program, while others will lend to students who are non-degree seeking or are enrolled less than half-time. A private education loan cannot exceed a student's Cost of Attendance when added to all the student's other financial aid. We confirm this at the time we receive the private education loan certification request from the lender.

Private (Alternative) Education Loan Considerations

Students enrolled in a degree program at the University of Tennessee at Chattanooga should always apply for Federal Direct Student Loans and parents of dependent undergraduate students should also apply for Federal Direct Parent PLUS Loans before considering a private (alternative) education loan. It is in the student and parent's best interest to borrow the maximum amount of Federal Direct Loans for which they qualify before borrowing a private education loan. Here are some things to consider:

  • Students do not have to start paying back their Federal Direct Stafford Loans until they graduate or stop attending school at least half-time. If you obtain a private loan, you may have to start making payments right away.
  • The interest rate on a Federal Direct Stafford Loan is almost always lower than that on a private loan - and much lower than a credit card!
  • The government will pay the interest while in school at least half-time for students who qualify for a Federal Direct Subsidized Loan.
  • Students do not need a credit record or a co-signer to get a Federal Direct Stafford Loan.
  • Federal Direct Parent PLUS Loans require a credit check but the qualifying criteria is not as strict as for private loans and, if approved, the parent can choose not to begin repaying the loan until the student graduates or is no longer enrolled at least half-time
  • Private loans cannot be consolidated with federal loans after graduation and are not eligible for the repayment plan options and loan forgiveness programs offered by the Department of Education.

Historic List of Private Educational Lenders

Students and/or parents who find they must apply for a private education loan may choose to contact their bank, credit union or other private lending institution to ascertain if they provide private (alternative) education loans. We strongly recommend you compare interest rates, loan fees and repayment plans before applying for any loan.

*The lender listing below is not a preferred lender list and is provided only as a courtesy. The lenders are presented in alphabetical order. You may choose a lender that is not on this list.  The University of Tennessee at Chattanooga receives no benefits from any lender. See the University of Tennessee at Chattanooga Financial Aid Personnel Policy Statement for further information.

*During the 2015-16 Award Year, UTC students received private education loans from the following lenders:

  • A+ Federal Credit Union
  • Citizens Bank
  • College Avenue Bank
  • cu Student Loans
  • Discover Student Loans
  • FedEx Employees Credit Association
  • Fifth Third Bank (no longer available)
  • Irving City Employees Federal Credit Union
  • Liberty Bank
  • ORNL Federal Credit Union
  • Regions Bank
  • Safe CU
  • Sallie Mae
  • Sun Trust Bank
  • TriStar Bank
  • Wells Fargo

Each lender offers various interest rates, repayment terms and conditions and eligibility requirements, therefore, you are strongly encouraged to research each lender that offers private loans thoroughly before applying for a private loan. Contact the lender directly for further information on requirements, rates, and application procedures.

The Private (Alternative) Loan Process

When a lender approves a student's application for a private education loan, the lender then transmits a loan certification request to the UTC Office of Student Financial Aid to complete. Once the loan is approved, you must complete a UTC Private Loan Request Form and submit it to the Financial Aid Office. This form may be submitted via fax to 423-425-2292. The Financial Aid Office confirms the requested loan amount, when added to all other aid the student is receiving, will not exceed the student's Cost of Attendance (COA) as well as various other items.  The school certifies the loan, and the lender disburses the funds.*Please be aware that Private Loan Processing may take up to 30 days.

The Private Education Loan Applicant Self-Certification Form

The Truth In Lending Act (TILA) and the Higher Education Act of 1965, as amended (HEA), require a lender to obtain a self-certification signed by the private loan applicant before disbursing a private education loan. The lender may provide the applicant the self-certification form; however, you can also obtain the form by clicking on this link, Private Education Loan Applicant Self-Certification Form. This form is to be submitted to the lender. To complete Section 2 of the Self-Certification Form, you will need UTC's Cost of Attendance (COA) and the *Estimated Financial Assistance (EFA) information that you will need can be found by logging into your MyMocsNet account once financial aid eligibility has been determined. *To view your Estimated Financial Assistance, log into your MyMocsNet account, click on Money Tab; then, My Award Information; select the Aid Year and hit submit.