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Transcript: How to Create a Student Loan Budget for Private Alternative Loans

This video explains how to create a student loan budget for private alternative loans.  In this video, we will review step-by-step instructions and calculations to help you decide how much you need to borrow in a private alternative loan. In order to help you with these calculations, please download the Private Loan Worksheet

If you plan to borrow the maximum amount the student is eligible for, please use the second worksheet, Private Loan Maximum Worksheet

Next, please log onto LionPATH to view your current Award Summary. You will need to calculate your billable costs as well as the amount of your aid. Document the aid total for the entire year if you plan on taking out a loan to cover both fall and spring. We recommend applying for fall/spring loans if possible to reduce the number of credit checks and ensure the entire bill for the year is covered. If you only want a private alternative loan for one semester, document only the fall or only the spring.  Please note, if you choose to apply for a private alternative loan for the entire year, the amount you request will be evenly split between the fall and spring semesters.

First, you must calculate your billable costs. If you are using the Private Alternative Loan Maximum Worksheet, you will enter Total Cost of Attendance instead of Billable Costs. The maximum amount you can apply for and the tuition and fee rates will not be finalized until late July.

Please keep in mind, you may not need to borrow the maximum amount when considering a private alternative loan. To calculate your Billable Loan Amount, all you need to do is subtract your Total Aid from the Billable Costs. You can enter this information in Part 1 of the worksheet.

Now we will move on to Part 2 of the worksheet. Enter your Billable Loan Amount from Part 1 in the appropriate box. Next, enter the total amount of personal contributions you plan to use toward your education. If you don’t plan on using personal funds, just enter “zero” in the Total Out-of-Pocket Contributions box.   Subtract your Total Out-of-Pocket Contributions from your Billable Loan Amount, and you will have the Amount Needed to Borrow.

This final amount is the amount you need to borrow from a private lender of your choice. A list of lenders is available on our website. 

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