If you find yourself in a desperate financial situation, emergency student loans can help. These are short-term loans available to help students get through unexpected events. The influx of funds can help you focus on finishing school.
Let’s explore when emergency student loans come into play, where to find one, and how to apply for them. Plus, we’ll map out some alternative funding solutions.
In this guide:
- When taking out emergency student loans makes sense
- How to get emergency student loans
- Alternatives to emergency student loans
- Final Thoughts on Emergency Loans for Students
When do emergency student loans make sense?
Most students will face unexpected expenses, such as car repairs or medical bills, while in school. An unexpected expense can even include covering your tuition payment if you just realized a month before the semester starts that you don’t have enough financial aid.
A few situations that might push you to seek out an emergency student loan could include:
- Loss of a parent
- Dismissal from a job or unexpected reduction in income
- Natural disaster
- Crime or theft
Whether the need for cash occurs before or during a semester, you’ll have to demonstrate that your need is a pressing one. Depending on the circumstances, emergency student loans might be an option. But some situations open the door to other funding opportunities, such as grants or scholarships.
Steps to get emergency student loans
Emergency student loans can alleviate the pressure of financial hardship. You may be able to obtain one of these loans through your college, federal aid, or private student lenders. We’ll walk you through the steps you should take below.
Step #1: Talk with your financial aid office
Start by reaching out to the financial aid office at your college. After sharing the unique details of your situation, an administrator can walk you through the options at your disposal.
If your school doesn’t offer emergency student loans, the administrator will be able to point you in the right direction.
If your school does offer emergency student loans, you’ll likely need to meet a specific set of criteria. For example, you might need to have a certain GPA or no registration holds on your account. But most emergency student loans won’t take credit into account.
It’s a good idea to come to this conversation prepared with documentation about your financial situation. The evidence you bring should confirm your need for emergency funds. This can speed the process along to finalize funding within as little as a few days.
The amount you can borrow varies based on the school, although most will have a maximum loan amount that is significantly lower than their cost of attendance. The cap is typically between $500 to $1,500. If you take out an emergency loan, be prepared for a short repayment period of between 30 to 60 days.
Step #2: Claim unused federal student aid
The Free Application for Federal Student Aid (FAFSA) could unlock access to emergency funding solutions for you. Ideally, you will have filled one out already, but if not, the government accepts FAFSAs throughout the year.
But what if you already filed a FAFSA and turned down the money, thinking you didn’t need it? This is good news—there’s no need to panic. You can change your mind. Once you have filed a FAFSA, you are allowed to accept the funds at any time during the academic year.
If you want to accept the funds, work with your financial aid office. An administrator can walk you through the paperwork process of requesting the amount you need. It shouldn’t take more than 14 days to receive the funds.
Step #3: File the FAFSA if you haven’t already or if your situation has changed
If you haven’t filed the FAFSA, it’s time to tackle this form.
After submitting the form, you’ll find out about any federal aid available to you. That includes not only student loans but possibly grants as well!
For students with a big change in their financial situation, such as a job loss or the passing of a parent, it’s worth it to resubmit your FAFSA to reflect your new reality. Depending on the changes, you might qualify for more aid.
It takes up to 10 days to process a paper FAFSA form, but the online form will be processed within five days. After the form is processed, it will take more time to accept and receive the funds. The exact timeline will vary based on your school.
Step #4: Apply for private student loans
Next, you can apply for private student loans. The interest rates will likely be higher than federal student loans, but they can be a good funding option if you have already hit your federal limits.
You can apply for private student loans through a bank, credit union, or online lender.
The application requirements will vary depending on the lender you choose. But as a general rule, you’ll need to provide documentation proving your citizenship, identity, income, and school information. If you have poor credit history or limited cash flow, your lender will require you to use a cosigner.
The lender will usually distribute the money to the school within a few days or weeks. Once your tuition is covered, your school can give you any leftover funds via ACH transfer or check. You can use this remaining money for any living expenses or other costs you may have.
Alternatives to emergency student loans
Emergency student loans are a great resource for some students. But not all schools offer this opportunity. Other students have already tapped into all of their available federal aid and don’t have the credit required to qualify for a private student loan.
Luckily, there are other options on the table to help you through a cash crunch.
Grants and scholarships
Grants and scholarships are a useful avenue to pursue. Neither of these funding solutions requires repayment!
Before committing to another loan, ask your financial aid office about any grants or scholarships accepting applications. If you land one, that can alleviate your current financial situation and prevent adding another loan to your debt burden.
An emergency short-term loan isn’t the only way schools offer their students a helping hand. Many schools offer extensive non-financial support to assist students going through hard times.
You might find on-campus support in the form of tuition vouchers, housing opportunities, bus passes, or food pantries. Even if your school doesn’t offer this assistance directly, a financial aid administrator may know of off-campus organizations that will step in to help.
Whether or not you are a student, personal loans are an option. Although most require good credit, you can use the approved funds for any reason. So, if an unexpected expense threatens to derail your educational aspirations, a personal loan could be a solution.
Be prepared to start making payments immediately. And don’t forget to shop around for the best interest rate. Otherwise, you could overpay by thousands!
Payment plan or extension
If you aren’t able to come up with the funds to pay for a major school cost, reach out to the financial aid office. Although they are unlikely to waive the balance due, an explanation of your situation could lead to a payment plan or temporary extension. Here is how those options work:
- Payment plans for tuition: Payment plans let you spread out your tuition into affordable monthly or bi-monthly payments. Most schools don’t charge interest, but there may be a service fee for signing up.
- Temporary extension: Some colleges may be willing to grant you an extension on paying your tuition. However, this is usually reserved for extreme cases such as an illness or a sudden death in the family. And it’s important to remember that an extension is simply delaying your financial obligation, not providing a long-term remedy.
Even if your college’s financial aid office doesn’t offer payment plans or extensions, they may be able to point you toward a solution for your situation.
Students facing dire financial straits could find themselves hunting for an emergency loan right before or during a semester. Whatever the reason for your situation, it’s important to take action quickly and to reach out for help.
Your academic advisor and financial aid office are there for you. An emergency loan might be an option. But if not, they can help you identify additional sources of funding to keep your studies on track. The sooner you contact them, the sooner they can try to help you.