Update (October 20, 2010):
The Maine Loan now has a fixed rate of 7.75% and a 4% guarantee added to principal at the time of disbursement.
The starting interest rate on the North Dakota DEAL loan program (for ND residents and those attending ND institutions) adjusted to 1.79%, with is effective through December 31, 2010.
Update (July 14, 2010):
The starting interest rate on the North Dakota DEAL loan program (for ND residents and those attending ND institutions) adjusted to 2.04%, which is the effective rate through September 30, 2010.
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With peak lending (and borrowing season) upon us, I thought it would be useful to update my previous post on state alternative loan programs.
Disclaimer: Private student loans should be considered as a "last resort" only. Students and parents should access all other available forms of aid, including scholarships, federal grants (e.g., Pell) and federal loans (with names like Stafford and PLUS) before considering a private student loan.
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I thought that headline might get your attention. First the caveats: The DEAL loan administered by the Bank of North Dakota, a state-run bank, is a variable-rate loan, so as interest rates increase it will too [DEAL also has a fixed-rate option which you will see described below]. Second, that 1.78% rate is available only if you are a resident of North Dakota OR attend an eligible institution in that state. If you attend an institution or your legal residence is in South Dakota, Minnesota, Montana, Wyoming or Wisconsin, then the starting interest rate is 2.78%.
Here is a spreadsheet with links to each of the websites for these state loan programs (please feel free to redistribute this list if you think it will be useful for your students): Download State_Private_Loan_Programs_2010_11
Here are some attributes of these loans that are worth repeating again: