Alternative loans can burn students with higher interest rates, according to Cedric Barksdale, the senior assistant director of financial aid.

An alternative non-certified loan is one that bypasses the Office of Scholarships and Financial Aid. A private lender contacts the borrower directly.

“The interest rate [for alternative loans] is much higher,” Barksdale said. “I think most students who do take out loans like that … are not informed that they can borrow other loans.”

Alternative loans of this kind are not certified by the Office of Scholarships and Financial Aid, which means students have to do their own research, according to Barksdale.

“Most students usually borrow money through [an alternative loan] because they like the convenience of it,” Barksdale said. “It’s a one-step process.”

Examples of private lenders include Wells Fargo and Sallie Mae, according to Barksdale.

“Some lenders require for alternative loans that we, as a school, certify that the student is actually enrolled in school and that the amount they’re borrowing doesn’t exceed their budget,” he said.

Barksdale warned that students and others who are considering an alternative loan should take caution.

“The only thing I could say is for the consumer — beware — meaning that the student should make sure before signing that you know what you’re signing,” he said. “Check with the Financial Aid Office for other alternatives.”

But an alternative loan is not a good option for students to pay for school, Barksdale said.

“I can’t see any reason why a student would want to borrow through an alternative loan unless that’s the last resort or if they’re not eligible for financial aid,” Barksdale said.

Barksdale said he does not think one reason students take out alternative loans is that they have not heard of other options the University offers.

“I would say most students here at N.C. State are aware of the Financial Aid Office and other types of loans,” he said. “Here at N.C. State, I think it would be highly unlikely that a student would say that they borrowed [through and alternative loan] not knowing that they could borrow somewhere else.”

Mitchell Alexander, a freshman in First Year College, said that although he had not heard much about alternative loans, they seem like a bad idea.

“It sounds like with [alternative loans], you’re not as informed as you would be with a Financial Aid Office supported-one,” he said.

Alexander said, however, that he would still consider taking out an alternative loan if he needed to.

Meredith Tuttle, a junior in environmental engineering, said one reason students may go through with alternative loans is because it is their only option. She said some students who are unable to get a loan or other aid through the Financial Aid Office may turn to alternative lending.

“[An alternative loan] is bad if they charge more,” she said. “But, if you need the money, you should be able to get it.”