Poor Credit Student Loans
Affordable Funding Sources
If your credit is bad then you have had previous debt and enough time to mismanage it. So now you want to go to college and don't know how you're going to get a student loan, right?
Even if your credit is bad you still can afford going to college. There are a number of student funding options that have nothing to do with your existing credit. There are Federal Stafford Loans, Perkins Loans, and other non-credit based government loans, Pell Grants and other types of scholarships and grants.
Stafford Loans
The federal Stafford Loan comes in two types - subsidized and unsubsidized. Both of these are relevant to all students, even those with bad credit or no credit. The truth is, credit doesn't matter with the Stafford loan.
The subsidized Stafford Loan is completely awarded based on the economic needs of the borrowing student. And the government pays the accruing interest on the loan.
The unsubsidized Stafford Loan is available to every student, regardless of need. However, if you are depending solely on the Stafford Loan because of your credit, the loan awards are often meager. This is why so many college students carry multiple student loans, some of them credit-based alternative loans - so they can cover the costs of auxiliary college expenses. And this is where future credit problems often begin to germinate.
Another advantage to the Stafford Loan is that you can reapply every school year.
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Perkins Loans
The federal Perkins Loan is another government subsidized student loan that does not require a credit check. Perkins loans are available for both undergraduate and graduate students. Typical loan awards are between $1,000 and $4,000 for each school year, not to exceed $20,000 total.
Alternative Non-Credit Based Loans
If you are lucky enough to be pursuing a degree in one of the health science fields, such as medicine or nursing, there are student loans specifically designed for health science students:
- Loans for Disadvantaged Students
- Nursing Student Loan Program
- Primary Care Loan Program
Loans for Disadvantaged Students
The Loans for Disadvantaged Students program is sponsored by the Department of Health and Human Services and is a low-interest, non-credit based loan, available to socially and/or financially disadvantaged students seeking degrees in approved areas of the health sciences profession. You are required to apply for the Loans for Disadvantaged Students program through the financial aid office of the participating school. They in turn choose the recipients and disburse the loans.
Nursing Student Loan Program
The Nursing Student Loan program provides up to $4,000 per school year to qualifying nursing school students. Loans are low-interest and come with a grace period of 9 months. Recipients must be enrolled at least half-time in an approved nursing program and prove adequate financial need. Applicants file through the financial aid office of the participating school.
Primary Care Loan Program
The Primary Care Loan program is designed to provide auxiliary, non-credit based student loans to those pursuing medical degrees with a focus on primary care. Loans feature a grace period of 12 months. One stipulation is that the recipient must remain practicing primary care for the duration of loan repayment.
Scholarships and Grants
The federal Pell Grant provides grant money to only the neediest of students. However, if you feel as though you qualify, the application may be worth the effort. The beauty of a Pell Grant is that disbursed funds do not require repayment - they are a gift.
Scholarship and grant money is available from a plethora of sources. Nearly every state government offers scholarship and grant money, if you explore the resources deeply enough. Also, if you are pursuing a specialized degree or doing graduate research work, many professional organizations and associations extend large grants for students in a niche specialty or those conducting research. These institutions will never even look at your credit report.
Consolidation
If you already have poor credit, the last thing you need is more of the same. Loans that allow you to consolidate your student loans are commonplace and encouraged by most lenders. In the event you are strapped for funds when loan repayment rolls around, you should apply for the federal loan consolidation. The federal Loan Consolidation program allows you to roll all of your federal student loans into one, low monthly payment. In some cases you may cut your monthly student loan debt by 50%. However, you will notice that your loan repayment period is extended in order to offer such a low monthly payment.
Repairing Credit
Credit counseling is available through many student loan providers, such as Sallie Mae and similar corporations. While these companies are for-profit businesses, they nevertheless have a mission to make higher education possible. If you are denied loans by student loan providers, in many cases they will work with you to repair your credit.
