North Dakota Student Loan Programs
Shop for Low Rates
The Bank of North Dakota, serendipitously owned by the state government, provides a number of attractive student loan options to North Dakota residents. BND is akin to a state-sanctioned clearing house for FFELP loans, college planning tools, interest rate calculators, and even information on the tax benefits of your financial aid package. But perhaps above all the most valuable service provided by BND is their low-cost, alternative student loans.
Alternative Loans
Alternative loans are those that provide auxiliary funding above and beyond that of your federal loans. Studnets cannot afford to go to school if they have to pay thousands of dollars out of pocket. In the interest of improving the national economy and the economies of the states, most state governments sanction a private loan via tax-exempt bond monies. When states can unleash money not taxed by the government it can then be turned around and offered to studnts like so much loan real estate and with the lowest possible interest attached.
BND Private Loans
The Bank of North Dakota offers a few varieties of private, alternative loans, known collectively as DEAL loans. DEALs are the flagship loan program provided by North Dakota for the deliberate purpose of helping to put more kids into college, at the same time growing the state’s economy:
- Dakota Education Alternative Loans are open to undergraduate and graduate students who are going to school on at least a half-time basis.
- Medical DEAL Loans are exactly as they sound: a more expansive financial aid loan for those students in costly and long-term college programs.
Applying for a DEAL
DEAL loans are doled out based on applicant’s credit history. If you are like over 50% of all college students you will likely have to secure a co-borrower, or co-signer, for your alternative student loans. A co-borrower may be a parent, a relative, or close friend. Make sure that the individual you choose has a solid credit history, a good income and an acceptable debt-to-income ratio. The interest rate and total amount of loan may be based on the borrower’s credit record.
Paying on a DEAL Loan
DEAL loans require the borrower to pay on the interest as soon as the loan is disbursed or paid out to the college or university. At this point students will begin monthly payments that only cover the interest on the loan, which is essentially the “rent” you pay for borrowing someone else’s money for a length of time. The principal, or true amount of the loan, is not due until six months following your graduation. This has become a pretty standard grace period and may or may not be a benefit to you.
Special Loan Programs
A unique loan product offered by BND is the Driver Education Student Loan. North Dakota students enrolled in the Truck Driving Program may qualify to receive this loan. This is also a credit-based program and the loan comes due within a much shorter span of time than the traditional student loans.
BND FFELP Loans
All students are required to apply for federal student loans before they apply for anything else. And it is not uncommon for students to carry multiple loans.
Students may take the opportunity to apply for their corps of federal loans, including the subsidized or unsubsidized Stafford Loan, Perkins Loan, Parent PLUS Loan or Grad PLUS Loan right through the BND portal. You can fill out the FAFSA on the BND website and check up on the latest interest rates; even apply for a Federal Consolidation loan if your payments become too unwieldy to handle.
