Monday, September 19, 2022

Can You Take Out Loans For Community College

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Responsible Borrowing

If the estimated payments will cause a financial strain, the family has to consider its options. The student may want to attend a lower-cost community college to complete their lower-division or general education requirements and then transfer to a university, or attend another college completely. The family can also pull together to earn additional money, or the student can intensify the search for scholarships to locate additional funding.

Getting Student Loans For Your Associate Degree

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What To Avoid When Paying For Summer Courses

When and how you apply for funding for summer classes can affect whether or not you get approved. Avoid these three summer funding fails:

  • Completing the wrong FAFSA. Its up to your school to decide what academic year your summer courses fall under it could be covered by the previous or next years FAFSA. Thats why its crucial to reach out to your financial aid office before applying.
  • Registering for too few classes. Many schools require you to take at least six credits to be eligible for financial aid. Know what the credit requirements are before you apply or consider registering for an additional course.
  • Signing up at the last minute. The later you register, the more likely you wont have time to apply for the least expensive options like scholarships, grants and even federal aid.

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Can You Take Out A Student Loan For Living Expenses

Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

Taking out student loans is a rite of passage for many college students. Not only must college students use loan funds to pay for tuition and fees, they often need to use those funds to pay for other items like room and board. If youre considering student loans, you may be asking yourself questions like, what can student loans be used for? or, can you take out a student loan for living expenses? This post aims to answer all those questions.

You can use student loan money to pay for living expenses, but it comes with a significant catch it adds to your balance, thus increasing your indebtedness once it is time to make payments. If youve received a refund after paying for tuition and fees and are wondering what can student loans be used for, here are some things to keep in mind.

What Is The Average Cost Of Community College

The Do

Community college programs tend to be significantly cheaper than four-year schools. The average cost of community college was $12,850 for the 2020-2021 school year, according to the College Board.

In comparison, heres how the average cost of college at a traditional four-year school breaks down:

  • In-state student: $25,890
  • Out-of-state student: $41,950
  • Private school: $52,500

Tip:

If you decide to take out a private student loan to cover your community college costs, remember to consider as many lenders as possible to find the right loan for you.

Recommended Reading: Can You Transfer Colleges After One Semester

What To Do If You Reach Your Borrowing Limit

If youve gone over your allotted amount of federal loans, there are a few things you can do to be in good standing again.

You can:

Repay Your Loans or Make Payment ArrangementsYou can contact the National Student Loan Data System to find out which loans are over your limit and how much you need to repay to regain eligibility for loan borrowing. We will need a proof of payment and an adjusted loan history after youve made a payment to continue to award federal aid to you. Information about this is also available on your Student Aid Report and from FAFSA.

Consolidate Your Loans: You can contact the servicer for your loans to find out how to consolidate them. We will need to see the proof of your consolidation arrangement before we can continue to award federal aid to you.

Sign a Reaffirmation Letter: You can sign an agreement, or reaffirmation letter, that acknowledges the debt and affirms your intention to repay the excess amount as part of the normal repayment process. You can contact your federal loan servicer directly to get a letter.

To find out who your servicer is, you can contact the National Student Loan Data System or the U.S. Department of Education at 1-800-433-3243.

Federal Direct Parent Plus Loan

Parents can borrow funds to cover educational costs for their dependent students. Students must be enrolled in and attend a minimum of 6 credit hours and meet the eligibility criteria outlined in the Federal Direct Parent PLUS Loan information. Parents can begin repayment when the loan is fully disbursed, with the first payment generally due within 60 days, or can choose to begin repayment six months after the student is no longer enrolled at least half time or graduates. There is no financial need required to be eligible however, total financial aid cannot exceed cost of attendance. The applicants credit history will be evaluated in determining loan eligibility.

Maximum award amount: Students costs not covered by other financial aid, subject to credit approvalEnrollment required: Students must be enrolled in, attend and maintain a minimum of 6 credit hours.Applications:

  • Federal Direct Parent PLUS Loan Request and Master Promissory Note. Please refer to the Federal Direct Parent PLUS Loan Application Instructions.
  • for more information about the Federal Direct Parent PLUS Loan, including eligibility criteria, fees, interest rates, and repayment information.

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    Turn To Federal Student Loans First

    Filling out the FAFSA allows you to qualify for federal student loans, both subsidized and unsubsidized. These loans should be your first choice for community college financial aid before taking on private student loans.

    Thats because federal student loans offer a range of benefits, including a fixed interest rate that is often lower than that of private loans, alternative repayment plans like income-driven repayment and the option to pause your payments if youre experiencing a hardship like a job loss or an illness. Federal student loans also dont require you to have a cosigner to apply, as many private loans do.

    Subsidized Direct Stafford Loan

    Can You Take Out Student Loans For Living Expenses?

    Subsidized loans are available to students who demonstrate financial need. The U.S. Department of Education pays the interest on a subsidized loan while the borrower is enrolled at least half-time and during the loan grace period. The amount of subsidized loan you borrow cannot exceed your financial need. Repayment begins 6 months after 1) you drop below half-time, 2) leave school, or 3) graduate, whichever happens first.

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    Not All Community Colleges Offer Federal Student Loans

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    By Ann Carrns

    Roughly one million community college students lack access to federal student loans, which may limit their options for financing their education, a new report finds.

    The report from the Institute for College Access & Success, a nonprofit focusing on college affordability, found that about 9 percent of community college students nationally attend schools that dont participate in the federal student loan program. In some states, the proportion of community college students attending schools that dont participate is much higher its more than 20 percent, for instance, in states including Alabama, Georgia, Louisiana, Montana, North Carolina, Tennessee and Utah.

    Community colleges provide an affordable path to college for many students they generally offer two-year programs and associate degrees to students, who may transfer to a four-year institution to continue their studies. Annual tuition and fees at community colleges average $3,260, compared with nearly $8,900 for in-state tuition at a four-year public institution, according to the American Association of Community Colleges. The associations latest fact sheet says that most full-time community college students work at least part time while enrolled.

    How To Use Student Loans For Living Expenses

    Borrowing money to pay your tuition is straightforward: you have a set dollar amount that must be paid to the school for each year of attendance. But borrowing money for living expenses can get more complicated. Its important to fully understand how youll receive your money, what type of loan you should apply for, and how much money you really need to borrow.

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    Loan Proration For Graduating Undergraduate Students

    If you are a graduating senior and only attending one semester, your Federal Direct loans may be prorated based on the number of credits for which you are enrolled. This means that you may not be eligible to receive your maximum annual loan limit.

    This affects students enrolled for only one final semester in an academic year: either fall-only, spring-only, or summer-only. For example, this will not affect students who are enrolled in fall and spring semesters and graduate at the end of the spring semester.

    Be Aware Of Student Loan Limits

    The Benefits Of Taking Out Loans For College : NPR

    Community college is a stepping stone to enrollment in a more traditional university for many students. Anyone who plans to attend community college before transferring to a four-year school should be aware that taking out federal student loans now can impact their borrowing ability later.

    The total limit for federal student loans is $31,000 for dependent undergraduate students and $57,000 for independent students. Dependent students are those who live at home or whose parents support them financially. Independent students are those who are married, 26 or older or have served in the military.

    Suppose youre a dependent student who borrowed $5,000 in federal student loans for your community college education. Unfortunately, youll only have access to $26,000 in federal loans to pay for the four-year institution. That should cover two years of community college and two years at a public, in-state university. However, it likely wont be enough for an out-of-state public or private college.

    Keep in mind that some maximum loan amounts are based on the cost of attendance. For Direct Subsidized Loans, each school determines the amount you can borrow based on the cost of attendance and other financial aid you receive.

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    Do You Receive The Rest Of The Federal Pell Grant After Paying For

    Off-campus housing can be a good choice for students who plan to attend school year-round, want to get away from the noise and distractions inherent in dorm life or who need to establish a rental history. However, while living in an off-campus house or apartment can be beneficial, it takes planning and a good budget to ensure you can pay rent and other monthly expenses on time.

    What Is Financial Aid

    Most students dont have the ability to pay for college out of pocket. Considering tuition, books, room and board, and other related fees, the cost can be substantial. Not surprisingly, most students need to research financial aid options.

    Financial aid consists of a variety of components that help students pay for college, such as scholarships, grants, loans, and work-study programs. Although some types of aid do not need to be paid back, others do.

    It wasnt until I talked to Rebecca that I learned that financial aid does not always equate to free money.

    Its absolutely possible to qualify for grants, which are essentially free money, Rebecca said, but most of the time, accepting financial aid means taking out federal loans.

    I suddenly felt ripped off. No oneNO ONEever told me that financial aid meantstudent loans. Having been raised to live debt free myself, the idea that student debt may be masquerading under a friendlier title didnt sit well with me.

    If financial aid is just a loan, I asked, how is it any better than getting a private loan to pay for college?

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    Best Private Student Loans Without A Cosigner

    Private student loans are offered through non-government banks and lenders. Each lender has a unique application process with its own eligibility requirements.

    If you dont have a strong credit score or a creditworthy cosigner, you likely wont be eligible for most lenders. However, our partners below offer student loans specifically to borrowers without a cosigner.

    • Best for undergraduates:Funding U
    • Best for juniors and seniors:Ascent
    • Best for international students:MPOWER
    • Best for income-based repayment:Edly

    How Do I Get A Private Student Loan

    How To Pay For College (The Right Way)

    To get a loan, you must apply through a lender, which includes 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 youre getting the best options for your financial scenario.

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    Can I Get Student Loans For Community College With No Cosigner

    Federal student loans are available for community college, and you dont need a cosigner for these. Private loans may be an option for students without a cosigner, but youll need to meet the minimum criteria set by each lender to qualify for a loan. Check out student loans without cosigner requirements for more information.

    Andrew Pentis contributed to this report.

    Student Loan Rates Are Rising

    Apply for a private student loan and lock in your rate before rates get any higher.

  • Type of schooling: undergraduate or graduate
  • Student status: dependent or independent
  • Annual vs. aggregate: per year vs. per lifetime
  • This chart from the Pennsylvania State University student aid office breaks down the limits depending on your situation:

    Dependent Undergraduate Student
    $31,000. A maximum of $23,000 may be subsidized. $57,500. A maximum of $23,000 may be subsidized. $57,500. A maximum of $23,000 may be subsidized. $138,500. The graduate debt limit includes Direct Loans received for undergraduate study.

    Besides these student loan limits, there are two other limitations to be aware of:

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    Federal Direct Loan Limits

    Mississippi Gulf Coast Community College is required to provide information published by the U.S. Department of Education to students at any time that information regarding loan availability is provided. The publication includes information about rights and responsibilities of students and schools under Title IV, HEA loan programs. National Student Loan Data System HEOA Section 489 amended HEA Section 485B

    If Mississippi Gulf Coast Community College enters into an agreement with a potential student, student, or parent of a student regarding a Title IV, HEA loan are required to inform the student or parent that the loan will be submitted to the National Student Loan Data System , and will be accessible by guaranty agencies, lenders, and schools determined to be authorized users of the data system.

    Visit StudentAid.gov for more information on types of loans available and other student loan information published by the U.S. Department of Education.

    Can You Get Student Loans For Community College

    Reasons to Attend a Community College vs. University

    Yes! Community college can be funded using student loans just like a four-year degree at a public or private university. Options include both federal student loans and private student loans.

    Federal student loans can offer some unique benefits, which well discuss a little later. One caveat to these loans, however, is that there are annual limits on how much students can borrow. Private student loans can be used to fill funding gaps when federal student loans for community college are exhausted.

    While some private student loan lenders may prefer to work with borrowers who are completing traditional undergraduate, graduate, or professional studies, there are still plenty of private student loans for community college students to choose from.

    Further on in this guide, well break down the details of some of the best private loan options for two-year students. But first, lets look at federal student loan options.

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    Use Private Loans To Fill The Gap Left By Federal Loans

    If you have a shortfall in federal student aid, you can apply for private student loans next. The exact process is different for every lender but generally, it involves filling out the application online and submitting any required supporting documentation. The kinds of things youll need to apply for private student loans include:

    • Social Security numbers for yourself and your cosigners, if applicable
    • Personal information
    • Income documentation, including pay stubs and/or tax returns
    • Rent/mortgage payment information

    You may also need to tell the lender where youre planning to attend school and what kind of degree youre seeking.

    Private student loans have pros and cons. Although variable rates often start low, they can go up at any time during the life of the loan. Also, the rates you qualify for usually hinge on your credit score. Without a high credit score, a cosigner may be necessary and not every lender allows for cosigner release.

    Remember that private student loans do not enjoy the same protections as federal student loans. While private lenders can offer rate discounts, deferments, forbearance, or even loan forgiveness in certain instances, these benefits and features are optional.

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