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 the best student loans for community college, follow these five important tips.
1. Prioritize low-cost federal student loans
When searching for the 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 free 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 2018!
|1 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 11/1/2018. Variable interest rates may increase after consummation.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* 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.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.94% – 12.78%1||Undergraduate, Graduate, and Parents|
|4.06% – 13.06%3||Undergraduate and Graduate|
|4.34% – 12.99%2||Undergraduate and Graduate|
|4.25% – 11.10%*,4||Undergraduate and Graduate|
|5.03% – 11.23%5||Undergraduate and Graduate|
|4.12% – 13.13%6||Undergraduate and Graduate|
|5.62% – 10.01%7||Undergraduate and Graduate|
|3.93% – 9.81%8||Undergraduate, Graduate, and Parents|
|4.26% – 12.13%9||Undergraduate, Graduate, and Parents|