Alternative Loans

Alternative Loan: Description and Purpose

An alternative loan (also called a private loan) is an education loan offered by private lenders such as banks, credit unions, or online financial institutions. Unlike federal loans, alternative loans are not funded or guaranteed by the government. They are typically used to help students pay for education-related expenses after federal financial aid options have been exhausted.

What Alternative Loans Can Cover

Certificate, Undergraduate, and Graduate Students

Tuition and fees
Books and supplies
Housing and transportation
Other education-related expenses

Continuing Education Students

Can only borrow up to direct cost

Key Features of Alternative Loans

Interest rates may be fixed or variable and are based on the borrower’s credit history
Many students require a co-signer to qualify or to receive a lower interest rate

Why a Preferred Lender List?

Due to recent changes in federal loan eligibility under the One Big Beautiful Bill Act of 2025, Berkeley College has established a Preferred Lender List for students who may need alternative loan options. While Berkeley College does not encourage borrowing unless necessary, we recognize that alternative loans may be helpful for some students and families facing financial challenges.

Federal Loan Changes Effective July 1, 2026

Parent Loans (Parent PLUS)

Capped at $20,000 per child per year
Lifetime maximum of $65,000 per student

Graduate PLUS Loans

Eliminated for new borrowers after July 1, 2026
Graduate students may borrow up to $20,500 per year (aggregate limit of $100,000) through Direct Unsubsidized Loans

Lifetime Aggregate Federal Loan Limit

A new cumulative cap of $257,600 across all federal loans, excluding Parent PLUS loans.

Impact on Berkeley College Students

The most significant changes are the cap on Parent PLUS loans and the elimination of Graduate PLUS loans. These changes may increase the need for alternative financing options, which is why Berkeley College has established a Preferred Lender List to help families make informed borrowing decisions.

Payment and Interest on Alternative Loans

Payment and interest on alternative loans may be deferred while the student is enrolled at least half-time and for up to six months after graduation. Interest accrues during the deferment period and is added to the principal balance (capitalized). To minimize total loan costs, it is strongly encouraged to make interest payments while the student is enrolled.

Withdrawn Students

For alternative (private) loans, the College will return excess disbursed funds to the lender when a student withdraws from a class or from the institution entirely. If the adjusted cost of attendance, minus financial aid, is less than the alternative loan amount disbursed, the difference is returned to the lender and applied to reduce the student’s loan obligation.

Borrowing Limits

Students and parents may borrow up to the student’s Cost of Attendance minus other financial aid received in certificate, undergraduate, and graduate programs. Continuing Education students and their parents can only borrow up to the direct costs of the program.

Credit Considerations

Interest rates and fees are based on the borrower’s credit score. Borrowers are encouraged to review their credit reports regularly to ensure accuracy.

Major Credit Bureaus

Why a Berkeley College Student May Need an Alternative Loan

Common Reasons

Federal and state aid may be insufficient to cover total education costs
Alternative loans can help bridge funding gaps
Some students may be ineligible for federal or state aid
Graduate or specialized programs may exceed federal loan limits
Alternative loans may offer additional borrowing flexibility

Which Source Should I Borrow From?

Important Borrowing Tips

Always exhaust federal loan options first
Borrow only what you need
Students may choose any lender; Berkeley College’s Preferred Lender List is available through the ELM Portal

Our Preferred Lender List (PLL) Selection Process

Selection Process Overview

Berkeley College issued Requests for Information (RFIs) to approximately 20 lenders
Lenders were evaluated on multiple data points

Primary Evaluation Criteria

Interest rate ranges
Fixed versus variable interest rates
Loan fees
Repayment options
Borrower benefits
Customer service quality
Ability to borrow for multiple semesters

Scoring Methodology

Each lender’s metrics were evaluated using the following scoring scale:

3 = Excellent
2 = Good
1 = Fair
0 = Poor

A minimum average score of 2.5 was required for inclusion on the Preferred Lender List.

Final Selection and Review Cycle

All lenders on our Preferred Lender List responded to the RFI (except NJCLASS, which is exempt as a state agency). The evaluation process will be conducted annually to establish a new preferred lender list for the upcoming year.

How to Apply for an Alternative Loan

Please use the links below to apply for an alternative loan through Berkeley College’s preferred lenders.

Application Links

For NJ residents and students attending Berkeley College New Jersey and Berkeley College NJ Online

ELM NJ and Online

For students attending Berkeley College New York and Berkeley College NY Online

ELM NY and Online

Various federal and state laws require institutions of higher education that participate in certain student loan programs to maintain and prominently display a code of conduct governing the activities of their associates and of private lending institutions involved in such programs.

Berkeley College requires its associates to observe the highest standards of ethics, professionalism, and service in carrying out their administrative responsibilities to the College and its students. This Code of Conduct, which constitutes the policy of the College, embodies those standards.

Duties of Berkeley College Financial Aid Professionals. The College requires associates involved in the financial aid process to act (a) in compliance with all applicable laws and regulations, and (b) in the best interests of students and prospective students. At all times, those associates are expected to provide accurate and unbiased information and offer their services to students and prospective students in a non-discriminatory manner. Furthermore, they are required to promptly disclose any potential conflicts of interest, and to report to appropriate College officials any violations or attempted violations of this Code by either associates or lending institutions.

Prohibited Conduct. The College and its associates, including associates’ family members, shall not

Enter into any revenue-sharing or other arrangement by which the College obtains a financial benefit from a lending institution, loan servicer, or guarantor (collectively, “Lending Institution”) in connection with student loans;
Solicit or accept any form of compensation of more than nominal value ($25), including fees, gifts, loans, services, computer hardware or printing services at below market cost, entertainment, hospitality, travel or lodging expenses, or other benefits from a Lending Institution in connection with the processing of student loans;¹
Recommend, require the use of, or assign loans to any specific external lender; refuse to process a loan involving a lender selected by a student; or maintain a preferred lender list that does not comply with the Department of Education’s requirements;
Maintain an employment or consulting arrangement with a Lending Institution, or receive anything of value for serving on an advisory board or board of directors of such Lending Institution;²
Permit an employee of a Lending Institution to (a) staff the College financial aid office, admissions office, or call center; or (b) represent herself/himself as an associate or representative of the College;³ or
Permit a Lending Institution to use College logos or trademarks in the marketing of loans or services to students, prospective students, or parents in a way that suggests sponsorship by the College.
Entrance counseling required by the Department of Education must be completed by the student without any assistance from Berkeley or a representative of Berkeley. Examples of improper assistance include providing answers to students completing the module(s), clicking buttons for them, or encouraging students to complete the entrance counseling at a faster pace. Violation of this provision may expose the employee to employment discipline.

¹This provision shall not prohibit acceptance of (a) counseling services provided to borrowers, so long as the College controls such counseling; the counseling does not promote the products of a specific Lending Institution; and the Lending Institution personnel conducting the counseling do not represent themselves as associates of the College; or (b) standard educational materials, activities, training, or other programs related to default prevention or financial literacy, as long as the identity of the Lending Institution that prepared the materials is disclosed; or (c) reasonable food and refreshments provided as an integral part of such programs or activities, or in connection with a reception given by a Lending Institution that is held in conjunction with a professional conference and is open to all conference attendees.

²This provision shall not prohibit an associate who is not involved in, is not responsible for, and does not benefit from the financial aid process from receiving compensation for serving on (a) the Board of Directors of a publicly traded or privately held company, or (b) an advisory board unrelated to educational loans; provided that any such relationship between an associate and a lending institution must be disclosed to the College promptly and in writing.

³This provision shall not prohibit the College from requesting or accepting assistance from a lending institution related to training for financial aid administrators.