Additional Funding Through an Alternative Student Loan

The cost of college tuition has been rising steadily for decades, and is now at the point where the average tuition at private schools is more than $25,000 per year. That of course translates to over $100,000 for four years, which is the traditional amount of time it takes to earn a degree. Public institutions fare significantly better, with average costs hovering around $7,000 per year for in-state residents. But that still means you somehow have to come up with at least $28,000 to get through school. With government aid being harder and harder to come by (and with strict qualifications attached), maybe it's time to look at alternative student loans.

Simply put, an alternative student loan is money for college that comes from sources other than the federal government. Usually, the competition to receive these funds is less fierce than for federal money, which means you have an excellent shot at getting what you want. Moreover, you do not have to demonstrate need in order to secure alternative student loans. Instead, lenders make their decisions based on your credit rating and the projected tuition costs at the school you're planning to attend. Since college students typically do not have sufficient credit, you'll likely need a cosigner, such as a parent or guardian.

Regular banks and credit card companies are the biggest sources of alternative student loans. The application procedure for prospective students is more or less the same as for anyone else wishing to borrow money. You have to fill out a bunch of forms and talk to a loan officer prior to getting the funds. Eligibility for an alternative student loan varies, but most of the time, these banks or credit card companies look at employment history and credit rating to see if you have any defaults in your past. In addition, there might be enrollment requirements, such as carrying a minimum number of credits each semester in order to defer repayment.

Another source for alternative student loans is your state government. Some state governments have special programs in place whereby residents that plan to attend state-funded schools can tap into monies designated for this purpose. These programs are fantastic where they're available, because the eligibility requirements are easily met and you can request anywhere from as little as $500 to as much as $125,000 for college costs. Of course, you should never request more than you actually need, since you'll have to pay everything back with interest, but it's nice to know that this type of alternative student loan is out there.

Make no mistake about it: getting money from the federal government is still the best way to pay for college if you don't have a huge trust fund waiting for you the day you turn 18. However, not everyone ends up with all the money they need from Uncle Sam. If you find that you're a little short on tuition funds, then getting an alternative student loan might be in the cards.