Community College Loans
Are You Missing the Money?
Community colleges are no longer the lowbrow fringe institutions they once seemed. The skyrocketing costs of traditional four-year colleges have impelled a growing population of students to evaluate their educational opportunities at the local and regional community college level.
Guess what? Despite plain-Jane veneers many community colleges now offer cutting edge technical programs and very successful two-to-four-year transfer programs, often called 2+2 programs.
An equally impressive range of financial aid and student loan products fits the community college mold. Here are the most popular student loans for community colleges as well as some you may be missing.
Community College Costs vs. Traditional College Costs
There’s a difference between what you pay at a community college compared to what you pay at a traditional college, but what exactly is the difference and is it worth it?
Compared to private colleges that on average may run you an annual tab of well over $20,000, you might find you can wring a full two years out of a community college for under $5,000.
Cost at a community college will depend on: the type of program you’re pursuing and regional location. Save even more money when you opt to live at home.
Popular Community College Loans
A common misconception is that federal student loans don’t apply if you’re going to a community college. Millions of community college students fail to file a FAFSA (Free Application for Federal Student Aid) every year for various reasons, some of which make no sense.
Improve your financial aid plan: find out what types of undergraduate student loans may offer a financial solution for your circumstances and file the FAFSA.
Federal Student Loans: Don’t Miss Out
Rule of thumb for federal student loans: if you’re attending school at least halftime, then you should apply for federal loans, no questions asked.
**Apply for federal loans by filling out the FAFSA online and filing it before the deadline. There is no other way to apply for federal funds. Don’t miss out on the most affordable loans going.
Popular Stafford Loans
Almost every student in the country qualifies for some money through the Stafford Loan program. You could qualify for subsidized, unsubsidized loans or a combination of the two types of Stafford Loans. These are the hands down most popular student loans—they are accessible to almost everyone and they are the most affordable. Guess what? By 2012 the Stafford Loan interest rate will be fixed at 3.4%.
Perkins Loans for Community College
The Perkins Loan program is a popular campus-based aid program and you may qualify even if you go to a community college. Find out if your college participates, first—ask your financial aid office. Here’s how the Perkins program works: federal funds are doled out to participating institutions--four-year and two-year—and in turn awarded to students that demonstrate the deepest financial need. Again, these are very low interest and long-term loans, but are far less common than the Stafford Loans. Your lender is your school.
What it takes to be first in line for Perkins Loan money from your community college:
File your FAFSA and apply as early as possible to the school of your choice. If you find out that your family’s economic situation qualifies you for a Perkins Loan the secret to actually getting funds is to apply to your school’s financial aid office for Perkins funds as early as possible. Why? Perkins Loan monies are distributed on a first come, first served basis and once the money is gone, it’s gone until next year.
Private Loans for Community College
If you get a “community college loan” it is just another way to say, private student loan. A few commercial student loan lenders have added community college loans to their arsenal of private loans. These financial tools may be beneficial, but only when used responsibly and under the right circumstances.
Federal loans should provide a significant chunk of your community college tuition when you attend halftime or more. But what happens if you:
- Drop below halftime
- Are unable to attend more than part-time
- Are taking standalone courses
and basically are disqualified from or limited in your federal student loans?
Private student loans, like community college loans and continuing education loans, are best used in tandem with federal loans. These types of financial tools are much more costly and risky than guaranteed federal student loans. Your credit history will matter when you go to borrow a private community college loan. If you have bad credit can you still borrow on a private loan for community college? Yes, if you plan ahead and borrow with a credit-worthy co-signor.
**Here’s the deal: only borrow what you absolutely need when using a private community college loan.
Sallie Mae, one of the most well-known student loan lenders and certainly one of the largest, offers an alternative loan for community college students. The Signature Student Loan for Community Colleges is designed for students in a two-year degree program. Eligible applicants must be able to pass the credit check or sign on with a co-borrower whose credit is decent. You may qualify to borrow as much as you need to cover the tuition costs and expenses and you have up to 15 years to repay the loan. You can choose from a number of repayment options.
Community College Loans You May Be Missing
Federal loans always come first and often lost in the advertising din of private loan providers are state-based student loans. Did you know that your state government might offer some of the best deals in both federal and private student loans?
Right now browse our A-Z list of state-based student loan programs. Find out if your home state or the state in which you’ll be going to school offers any student loans that may work for you.
**Example: Local and regional community colleges also widely offer their own loans. For example the North Carolina Community College Grant, Loan Program and Targeted Financial Assistance Program is a state-sponsored program designed to offer underprivileged students a chance for college aid. The Loan Program allows community colleges to autonomously extend short-term loans to students who are deemed worthy.
Remember, if you’ll attend community college half time or more, apply for your federal loans first. Augment with private loans only when absolutely necessary and don’t overlook the student loan deals your state government may offer.
