Of the 20.4 million students who go to college in the U.S., more than 40 percent attend community college.
Some of these students seek an associate degree, while others plan to transfer into a four-year program and earn their bachelor’s.
This “2+2” approach to college can be a huge money saver, since tuition and fees at community colleges are often a lot lower than they are at four-year schools.
That being said, the cost is still significant — averaging $3,570 per year, according to the College Board — so you might need financial aid and student loans to cover it.
If you’re looking for some of the best student loans for community college, follow these five important tips.
1. Prioritize low-cost federal student loans
When searching for your best student loans for community college, take advantage of low-cost Direct Loans from the Office of Federal Student Aid.
Currently, federal Direct Loans have a fixed interest rate of 4.45%. You might get unsubsidized loans, which collect interest while you’re in school, or subsidized loans, which don’t accrue interest until after your grace period ends. If you have financial need, you might also qualify for money such as from the Pell Grant.
To access federal student loans and grants, all you need to do is submit the FAFSA. After your application is reviewed, you’ll get a financial aid award letter with offers for federal student loans. You’re not obligated to take out these loans, but they likely have some of the lowest interest rates you’ll find on the market.
Note that some community colleges don’t participate in the federal student aid program. If your community college doesn’t take part, you might consider enrolling at a different school that does.
2. Search for state loans with low interest rates
For an additional source of government funding, find out if your state offers community college loans for living expenses and tuition. Some state agencies or state-sponsored nonprofits provide low-interest (or even no-interest) loans to residents.
The Massachusetts No Interest Loan Program, for example, offers zero-interest loans between $1,000 and $4,000 per year to residents with financial need. Similarly, the Alaska Supplemental Education Loan program offers low-interest loans to residents or students attending a participating school in the state.
To find out if your state offers this perk, head to its Department of Education website. You might also call the education office directly for information, or simply Google your state name, along with a term like “student loan program.”
Along with federal student loans for community college, state-backed loans have some of the lowest costs of borrowing thanks to low interest rates and fees.
3. Find affordable interest rates from a private student loan lender
Private student loans are another option for covering tuition and living costs. As you search for the best student loans for community college, your top priority should be finding the lowest interest rates and fees, which vary by lender.
To find out what interest rates you might be eligible for, apply for a rate quote with multiple lenders. This process is like comparison shopping; you’ll see a bunch of offers to ensure you’re getting the best deal.
You might also use a student loan calculator to figure out what your monthly payments and interest charges will look like for each loan.
All this research will ensure you’re finding the best student loans with the lowest rates for your situation. Pay close attention to interest rates and fee structures before choosing a lender to make sure you’re getting the best student loans.
4. Look for repayment options that fit your needs
Although a low interest rate is a top priority, it’s not the only one. You should also pay close attention to your repayment options on each type of loan. The best student loans will have flexible plans that meet your needs.
Note that federal loans and private loans have different repayment options. Federal loans come with a variety of plans, including the Graduated Repayment Plan and income-driven options. You can also temporarily pause your loan payments through deferment or forbearance if you continue your education later or hit tough times.
Private lenders, on the other hand, typically let you choose between terms of five, 10, or 15 years. Some lenders, such as College Ave, give you a few additional options for repayment while you’re enrolled in school, including:
- No payments
- Interest-only payments
- Flat monthly payments of $25
- Full interest and principal repayment right away
Some private lenders also offer forbearance if you run into economic hardship.
Consider what type of plan you’ll need as a student and after you graduate. By learning about the repayment plans of each loan type, you’ll be better prepared to choose the right loan — and know which ones to avoid.
5. Consider loans that could qualify for forgiveness
Finally, you might prioritize a loan that could be eligible for partial or complete forgiveness in the future.
Federal Direct Loans, for example, could qualify for forgiveness through programs like Public Service Loan Forgiveness or Teacher Loan Forgiveness. Alternatively, your loans could be discharged after 20 or 25 years of on-time repayment on an income-driven plan.
You could also find loan repayment assistance for private student loans. Several private and state-backed programs throughout the country offer assistance, typically in exchange for work in a certain field.
If your career plans could lead to loan forgiveness, consider taking out a loan that will be eligible for whatever forgiveness program is in your sights.
Do your research to find the best student loans and financial aid
Student loans are an invaluable tool for funding your education and earning your degree. But they also have a dark side, as too much community college student loan debt can leave you struggling financially for years after you graduate.
Before taking on loans you might later regret, make sure to do your research. By applying for federal financial aid and learning about repayment plans, you can find the best student loans for your unique situation.
Plus, you can reduce your college expenses with scholarships or income from a part-time job. By learning how to manage your money today, you’ll set yourself up for a more stable future.
Need a student loan?Here are our top student loan lenders of 2021!
|1.04% – 11.98%1||Undergraduate, Graduate, and Parents|
|1.13% – 11.23%*,2||Undergraduate, Graduate, and Parents|
|3.84% – 9.40%3||Undergraduate and Graduate|
|1.05% – 11.44%4||Undergraduate and Graduate|
|1.22% – 11.66%5||Undergraduate and Graduate|
|2.76% – 7.14%6||Undergraduate and Graduate|
|1.24% – 11.99%7||Undergraduate and Graduate|
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers. |
1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
Information advertised valid as of 4/22/2021. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for Earnest.
5 Important Disclosures for SoFi.
UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.26% annual percentage rate (“APR”) (with autopay), variable rates from 1.22% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.37% APR (with autopay), variable rates from 1.12% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.52% APR (with autopay), variable rates from 1.29% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 10.76% APR (with autopay), variable rates from 1.22% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 4/1/2021. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org)..
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
Undergraduate Rate Disclosure: Variable interest rates range from 2.76% – 7.14% (2.76% – 7.14% APR). Fixed interest rates range from 3.01% – 7.50% (3.01% – 7.50% APR).
Graduate Rate Disclosure: Variable interest rates range from 2.19% – 6.73% (2.19% – 6.73% APR). Fixed interest rates range from 2.89% – 7.09% (2.89%-7.09% APR).
Business/Law Rate Disclosure: Variable interest rates range from 1.36% – 9.54% (1.36% – 8.82% APR). Fixed interest rates range from 4.13% – 9.84% (4.13% – 9.12% APR).
Medical/Dental Rate Disclosure: Variable interest rates range from 1.36% – 8.34% (1.36% – 8.04% APR). Fixed interest rates range from 4.03% – 8.64% (4.03% – 8.34% APR).
Parent Loan Rate Disclosure: Variable interest rates range from 2.10% – 7.41% (2.10%-7.41% APR). Fixed interest rates range from 4.69% – 7.83% (4.69% – 7.83% APR).
Bar Study Rate Disclosure: Variable interest rates range from 4.45% – 9.60% (4.45% – 9.53% APR). Fixed interest rates range from 7.39% – 12.94% (7.38% – 12.81% APR).
Medical Residency Rate Disclosure: Variable interest rates range from 3.55% – 7.05% (3.55% – 6.77% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.07% APR).
Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2021, the one-month LIBOR rate is 0.11%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.
Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7 Important Disclosures for Discover.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.