Private loans can fill the gap if you still need assistance to meet your educational expenses after already receiving the maximum financial aid you are eligible for. Alternative loans can supplement federal student aid and pay expenses that government loans may not have been enough to cover.

Alternative loans are offered by private lenders such as banks and credit unions. Always ask, “Is this a federal student loan?” If it is, there may be some eligibility requirements and you should speak to your school’s financial aid office first.

If it's not a federal loan, usually interest rates are higher—sometimes significantly higher-and can change (up or down) monthly. There may also be loan fees that reduce the amount you receive and you may not be able to defer or cancel repayment in case of financial hardship.

Before taking out any loan, make sure you can repay it and borrow only the amount you need. For private/alternative student loans in particular, do your research first!  Shop around for the best rate and lowest fees.

If your loan is approved, the money will be given to you or sent directly to your school. It's up to you to manage those funds. To avoid expensive late fees, make your payments on or before the due date.

Warning: Private/alternative loans are being marketed aggressively to college students. Review the loan terms carefully before you accept them. Be sure you understand what you have to repay and when.