Many undergraduates attending college in the United States attend community colleges. Although these schools were once considered as poor relatives of traditional universities, community colleges are growing in stature and number, becoming key access points for students seeking schooling beyond high school. According to the American Association of Community Colleges, community colleges “are an American invention that put publicly funded higher education at close-to-home facilities, beginning nearly 100 years ago with Joliet Junior College”.
You may choose a community college for various reasons. It will help you ease into your college career, and going to a two-year college may allow you to remain closer to home while you attend college, to see if you want to attend in the long term. If scholarships and grants don’t cover your full expenses, community college students can use educational loans.
Community college offers you an affordable step between high school and college. It will allow you to complete your preliminary studies before you transfer to a four-year college, which can be expensive. If you’re like many students, a four-year degree may not fit with your professional and educational goals. Community colleges give you a chance to receive state of the art training you will need, with skills for a promising career in your future, and often comes with less student debt.
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Why Seek Student Financing for Community College?
You can save money when you choose to attend community college instead of or before a conventional four-year college. The average tuition costs at community colleges are much lower than at universities with four year programs. This is another reason why many young students are choosing community colleges. You can save a staggering amount of money.
Even with the savings you attain when you attend a community college, you may still need some type of financial aid to assist in helping you pay for your tuition. Scholarships and grants will provide assistance for your schooling, but they may not cover all of your costs for attending community college. Educational debt for community college offer you a way to fill in the gaps in your college funding.
Although you may have thought that loans were only available for four-year university students, you can actually get loans for a community college education, too.
FAFSA and Financial Aid for Community College
Even if you are attending a community college instead of a four-year college, you can still get financial help beyond scholarships and grants. Fill out your Free Application for Federal Student Aid (FAFSA) paperwork and send it in. Colleges, private lenders and government agencies all use FAFSA in order to determine what level of financial aid you may receive. Once you submit your FAFSA, a Student Aid Report will be issued, and you can start applying for financial aid, and this includes loans.
Federal Student Debt
The easiest student loans to access are administered by the US federal government. The Direct Loan program gives loans with low interest rates to students at any stage of college education. These loans are funded by the US government and the US Department of Education administers them.
These loans have low, fixed rates of interest, no application fees and grace periods. They have the most “student-friendly” plans for repayment, as compared to other loans. If you attend a community college and need financial help, and you have exhausted options for scholarships and grants, the federal loan program is a good fit.
Options in Federal Educational Debt
The Federal Perkins Loan is available for students at universities and community colleges. This program provides student loans for community college with low interest rates if you are in extreme need. You can borrow up to $5,500 as an undergraduate. Contact your college department of financial aid to see if your community college participates in this program.
The Federal Direct PLUS Loan is paid to the guardians or parents of students who are still undergraduates. It allows your parents or guardians to contribute to your education fund with a government loan. These loans have low interest rates, and your parent can borrow up to your total tuition cost, minus any financial aid you already receive. These loans are approved according to your parent’s or guardian’s credit history.
The Federal direct Unsubsidized Loan can be granted to undergraduate students, as well as graduate students. You do not need to demonstrate financial need. The amount of these student loans for community college will be determined by your college, and cannot be more than your tuition cost. You are responsible for accruing interest. You can defer payment while attending school, but the interest will all be capitalized and then added to your loan principle.
The Federal Direct Subsidized Loan may be a good choice for you if you have the required financial need. You must attend school half-time or more at an accredited community college. Your loan amount will be determined by the school you attend. If you receive a loan of this type, your interest is paid by the US Department of Education while you are in school and for the first six months after you graduate.
Private College Debt for Community College
Private loans for students offer another means of assistance if you find yourself with expenses you can’t meet. Most loans focus on students who attend four-year universities, but more private lenders are starting to offer student loans for those who attend community colleges, as well.
Private loans have numerous differences from federal student loans for community college. Your credit score will be checked by private lenders. This could be a problem if you have no credit history, or a limited or poor credit history. You can get a co-signer for a private loan, but that person will be responsible for the debt if you default.
Private loans have higher rates of interest and they have penalties if you pay off your loan early. The repayment plans are stricter than those associated with federal loans. In addition, private lenders have minimum limits for borrowing for student loans. You may have to borrow more than you really need.
You will find that a variety of lending institutions and banks offer private student loans for community college. They include:
- Wells Fargo
- Sallie Mae
- PNC Education Loan Center
- Discover Student Loans (available for Associate or Bachelor’s degree programs at eligible colleges)
Other Community College Options
When you are considering taking out a student loan for school, don’t overlook options at the state level. Only a few state governments actually fund their own loan programs, but many work with outside private lenders, in order to provide loan programs for students who are residents. These lenders are state approved or state certified providers of student loans. Check with the Department of Higher Education in your state to get more information about private lenders they endorse.
Some colleges offer loans to students of specific culture or ethnicity. Credit unions may offer student loans at a discount, and including fewer fees than most other lenders.
If you are unemployed, you may also qualify for federal educational programs. Community college financial aid offices and state unemployment offices generally have additional information on these programs.
Author: Jeff Gitlen
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