More than 7 million undergraduates enrolled in community college in 2017, according to the National Center For Education Statistics, up from just over 5 million in 1990. But it’s not surprising that the two-year schooling option is growing in popularity as the cost of a traditional four-year education continues to rise.
While you do get significant savings by attending community college (an average of $3,520 a year versus $33,480 a year for a four-year private institution), there will still be tuition to pay. Unless you have savings to cover tuition and living expenses, you’ll likely be looking for ways to finance your education.
Here’s how to get student loans if you’re starting your higher education at a two-year school.
How to get student loans for community college
It doesn’t matter whether you’re attending a four-year university or community college, the federal government has loan options for both. It provides several types of loans, which tend to have lower interest rates and flexible repayment terms compared to private student loans, meaning you could save more money over time.
Community college students could be eligible for these three federal loan programs:
This federal loan is available to students who prove they have a financial need. You can borrow up to that needed amount, which is determined by the school. To qualify, you must be enrolled no less than half-time at an accredited community college. The Department of Education will pay the interest on this loan while you’re still in school and for the first six months after you leave school.
With a Direct Unsubsidized loan, you don’t need to demonstrate a financial need, but the school will still decide on how much you can borrow. Rather than basing the amount off of your financial need, your school will look at the cost of attendance compared to the other types of aid you’re receiving. You are responsible for paying the interest, and the interest will accrue if you decide not to pay while you’re in school.
Another option to get student loans for community college is through the Direct PLUS program. This is a loan available to parents of community college students. Like the Direct Unsubsidized loan, they can borrow up to the cost of tuition minus any other financial aid. The parents’ credit history is taken into consideration for qualification, and interest will accrue during any non-payment period.
Private community college loans
Even if you get federal aid and scholarships, you still might not be able to cover the entire cost of your education. That’s when you might consider taking out private student loans to cover that gap in coverage. Not all lenders will offer this option, but here’s everything you need to know about how to get student loans from a private lender.
How do private student loans differ from federal loans?
Unlike federal student loans which are issued by the government, private student loans are offered through lenders such as Citizens Bank or College Ave. Since these are private institutions, the eligibility requirements, interest rates, and repayment terms can vary depending on the lender. So be sure to shop around to find the best private student loan rates.
Pros of private student loans for community college
In addition to helping you cover any gaps in coverage, private loans tend to have higher borrowing limits and can sometimes have lower interest rates. This means you can have more money upfront to cover costs associated with both tuition and living expenses, and potentially pay less over time if you secure a lower rate.
It’s also important to note that although there is a deadline to apply for federal loans through the FAFSA, there is no deadline to apply for a private loan. So, you can apply in the middle of a semester if you suddenly face financial hardships. Just be sure to give yourself a few weeks.
Cons of private student loans for community college
Since eligibility for a private loan is dependent on your credit history, if you have a low or no credit score, you might not be able to take out a loan. However, you could use a cosigner if you’re deemed ineligible. Even if you or your cosigner is able to take out a loan, a poor score could mean you’ll pay a higher interest rate and therefore more money in the long run.
Also, you don’t have as many repayment options with private student loans compared to federal loans. You might have to start making some type of payment while still in school, and failing to pay on time can mean you’ll face steep penalties. That’s why it’s important to understand all of the terms before taking out a private loan.
How do I get a private loan?
To get a loan, you must apply through a lender, which include banks or private institutions such as Sallie Mae. Each will have their own set of requirements to apply. They will then decide if you are eligible, how much you can borrow, the interest rate, and the repayment terms. Be sure to research a few lenders to make sure you’re getting the best options for your financial scenario.
Loans for community college are possible
As community college becomes a more popular option for students for a variety of reasons, it’s important for students to know their financial options for affording a two-year school. If you’re considering a community college, be sure you know how to get student loans to cover all of your costs.
Need a student loan?Here are our top student loan lenders of 2019!
|2 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.
(1)All rates shown include the auto-pay 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.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 5/29/2019. Variable interest rates may increase after consummation.
* 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.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
4 Important Disclosures for Discover.
5 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.
©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
* Offer valid for new Custom Choice Loans for which applications are submitted for a credit decision between 12:00:00am EST on June 1, 2019 and 11:59:59pm EST on August 31, 2019. A 0.50% interest rate reduction will be included in the loan options presented to an applicant during the online application process, upon passing the initial credit review. The interest rate reduction will be applied as of the first disbursement date and will be effective for the life of the loan.
6 Important Disclosures for LendKey.
1 – Terms and Conditions Apply
7 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.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.99% – 11.98%2||Undergraduate, Graduate, and Parents|
|4.50% – 11.35%*,3||Undergraduate and Graduate|
|4.84% – 11.99%4||Undergraduate and Graduate|
|3.27% – 10.80%5||Undergraduate and Graduate|
|4.46% – 9.43%6||Undergraduate and Graduate|
|3.74% – 9.72%7||Undergraduate, Graduate, and Parents|
|3.99% – 11.64%8||Undergraduate, Graduate, and Parents|