Student Loans for Community College

Attending community college is a great option for students who want to earn degrees or certifications that are not offered at four-year universities or who want to save money on tuition and fees.

The 4.6 million students enrolled at two-year community colleges in the U.S. last year, were able to gain valuable skills and knowledge needed to succeed in the workforce and/or were able to prepare for subsequent bachelor’s or graduate degree studies.

But what options do students have to pay for community college? Is taking out student loans for community college a possibility? This guide offers a closer look at some of the student loans community college enrollees may be able to obtain to help pay for their education.

In this guide:

• Can you get student loans for community college?
• Federal student loans for community college
• Private student loans for community college
• How to apply for community college student loans
• Are student loans usually needed for community college? 
• Are there other financial aid options for community college?
• Make sure you borrow responsibly

Can you get student loans for community college?

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 we’ll 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, we’ll break down the details of some of the best private loan options for two-year students. But first, let’s look at federal student loan options.

Federal student loans for community college

Federal student loans are administered through the U.S. Department of Education. Community college students who are interested in federal student aid will need to fill out the Free Application for Federal Student Aid (FAFSA) to apply.

There are several advantages associated with federal student loans, including:

• Low rates. Federal student loans can offer low interest rates, and with certain loans, the government will pay the interest for you while you’re in school or on a deferment.
• Fixed rates. The interest rate on the loan will never change.
• Easier approval. For most federal student loans, no credit check or cosigner is required as a condition of approval.
• Flexible repayment. The Department of Education offers several payment programs to borrowers, including the option to choose an income-driven repayment plan.
• Deferment and forbearance. Borrowers who are experiencing financial hardship may be able to temporarily pause payments on their loans through deferment or forbearance.

Now we’ll take a look at the different federal student loan options for community college students to help you decide which ones might best fit your situation.

Direct Unsubsidized Loan

Direct Unsubsidized Loans are offered to eligible undergraduate students. Financial need is not a consideration for these loans. The amount you can borrow is determined by the cost of attendance at your school and any other aid you receive. 

The most important thing to note about Direct Unsubsidized Loans is how interest is handled while you’re in school or if your loans are in deferment/forbearance. The government does not subsidize any of the interest on your loans at any time. This means that interest will accrue on your loan, even if you’re enrolled in school or you’ve deferred payments. 

• Rates: 3.73% for undergraduates
• Fees: 1.057% origination fee
• Repayment terms: 10 – 25 years
• Grace period: 6 months after leaving school or if you drop below half-time enrollment
• Eligible for forgiveness: Yes, but only for certain professions and only when certain payment requirements have been met

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Direct Subsidized Loan

Direct Subsidized Loans are administered through the same program as Direct Unsubsidized Loans. There are two main differences between them, however. Direct Subsidized Loans are based on financial need, and the Department of Education pays the interest on them while you’re enrolled at least half-time, during the grace period, and during deferment periods.

First-year undergraduate students who are still dependents can borrow up to $3,500 in subsidized loans for the year. The annual subsidized loan limit increases to $4,500 for the second year of enrollment and $5,500 per year for the third year and beyond.

• Rates: 3.73% for undergraduates
• Fees: 1.057% origination fee
• Repayment terms: 10 – 25 years
• Grace period: 6 months after leaving school or if you drop below half-time enrollment
• Eligible for forgiveness: Yes, but only for certain professions and only when certain payment requirements have been met

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Direct Parent PLUS Loan

Direct Parent PLUS Loans are designed for parents who want to help their undergraduate students pay for college. Eligible parents can borrow up to the school’s cost of attendance, less any other financial aid received.

The Department of Education does check your credit history when determining eligibility for Direct Parent PLUS Loans. Borrowers with an adverse credit history won’t be able to qualify. Parents also have to meet the general eligibility requirements for student aid, including being a U.S. citizen or eligible noncitizen, having a valid Social Security number, and demonstrating financial need.

• Rates: 6.28%
• Fees: 4.228% origination fee
• Repayment terms: 10 – 25 years
• Grace period: None
• Eligible for forgiveness: Under certain conditions, including the death of the student for whom the PLUS Loan was taken out. Public Service Loan Forgiveness may be available for parents who consolidate PLUS Loans into a Direct Consolidation Loan, enroll in Income-Contingent Repayment, and meet other requirements.

Private student loans for community college

Using private student loans to pay for community college could make sense if you’ve reached your federal loan limit. Keep in mind, however, that private loans almost always require a credit check to qualify. If you haven’t built up sufficient credit history yet, you may need a cosigner to get approved.

Interest rates and fees can also work differently for private student loans compared to federal loans. Rates may be fixed or variable, and lenders can charge a variety of fees and penalties. Private lenders are not obligated to offer income-driven repayment options or deferment periods to borrowers.

More importantly, not all private student loan lenders work with community college students. As you shop for private student loans, it’s important to consider:

• Enrollment requirements. Typical requirements include being enrolled at least half-time at an eligible higher-education institution.
• Interest rates. Variable rates can be attractive while they’re low, but if rates increase, you may pay more for your loan than you would with a fixed rate.
• Loan limits. There may be a minimum amount you’re required to borrow or a maximum aggregate loan limit.
• Repayment terms. Some lenders allow for interest-only payments while in school, but not all do. Also, consider whether grace periods or hardship deferments are allowed.

Finding the right lender to work with can require some research. To save you time in your search, we’ve put in hours of research into our partners to determine which were the best. As a result, you’ll find four of the best student loans for community college below.

College Ave

College Ave was founded in 2014 by former executives of Sallie Mae. The platform offers an alternative path to student loans for undergraduate students and their parents, as well as those seeking career loans or student loan refinancing.

Compared to other lenders, College Ave is a standout thanks to its combination of experience, high loan limits, and flexible repayment terms. The company’s transparency is also a plus, as College Ave strives to make understanding student loans as easy as possible.

Eligibility details

As noted, College Ave offers student loans for undergraduates and their parents. The minimum loan is $1,000, but students can borrow up to 100% of the school-certified cost of attendance.

In regard to eligibility, there are certain requirements you need to meet. To qualify, you must:

• Be enrolled at an approved U.S. college or university
• Be a U.S. citizen or permanent resident (international students can also apply with a cosigner who is a U.S. citizen or resident)
• Meet minimum credit score requirements
• Meet minimum income requirements

If your credit score is on the lower end, you’ll likely need a cosigner to get approved. Also, College Ave doesn’t lend to people who have filed for bankruptcy.

Loan terms

Here are some important terms to know about College Ave’s undergraduate student loan:

• Fixed rates (APR): 3.49% – 12.99%
• Variable rates (APR): 1.19% – 11.98%
• Rate discount: 0.25% discount for setting up automatic payments
• Loan amounts: $1,000 – 100% of the total cost of attendance
• Repayment terms: 5, 8, 10, or 15 years
• In-school repayment: Full, interest-only, flat $25, or deferred
• Grace period: 6 months
• Fees: Late payment fee

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Sallie Mae

Sallie Mae originally began as a government-sponsored entity in 1972, formed for the purpose of servicing federal student loans. In 2014, Sallie Mae became two distinct companies: SLM Corporation and Navient.

SLM Corporation or Sallie Mae, is a private student loan originator. It’s one of the largest private student loan companies in the country. The second company, Navient, is a servicer for federal and private student loans.

Eligibility details

Sallie Mae offers loans to undergraduates and their parents, and others entering certain professions. That includes medical students and medical professionals, business students, and law students.

Sallie Mae accepts borrowers with a wide range of credit profiles, though a cosigner may be required for those with limited credit history. International students and Deferred Action for Childhood Arrivals (DACA) recipients may qualify if they have a cosigner who is a U.S. citizen or permanent resident.

One unique advantage is that Sallie Mae lends to part-time students, something other lenders don’t always do. Sallie Mae also offers multiple repayment and deferment options to make repaying your loans easier.

Loan terms

Here are some important terms to know about Sallie Mae’s undergraduate student loan:

• Fixed rates (APR): 4.25% – 12.59%
• Variable rates (APR): 1.13% – 11.23%
• Rate discount: 0.25% discount for setting up automatic payments
• Loan amounts: $1,000 – 100% of the total cost of attendance
• Repayment terms: 5 – 15 years
• In-school repayment: Interest-only, fixed, or deferred
• Grace period: 6 months
• Fees: Late payment fee

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Ascent 

Ascent Funding was founded in 2015 and offers both cosigned and non-cosigned loans to undergraduates students. Loans are also available to fund tech bootcamp expenses. The company is notable for making student loans more accessible to students who don’t have a traditional credit history or profile.

Ascent loans are competitive, in terms of the interest rates and fees. There’s also a high aggregate loan limit, although it’s important to keep in mind that the loan terms and limits you qualify for can hinge on your credit history and whether your loan is cosigned.

Eligibility requirements

Ascent offers three options for undergraduate loans, with funding up to 100% of the school’s cost of attendance, less any other aid received. 

The first option is the Cosigned Credit-Based Loan, which is available to students who are enrolled at least half-time and have a credit-worthy cosigner. International and DACA students can apply for these loans. 

The next two options are non-cosigned loans. The Credit-Based Loan is open to U.S. residents and DACA students who have at least two years of credit history and meet minimum credit and income requirements. Juniors and seniors can apply for the Outcomes-Based Loan if they have at least a 2.9 grade point average (GPA) and satisfactory attendance. 

Approved students can use Ascent loans to build credit history in their own names, even if they have a cosigner. Cosigner release is available after making 12 on-time payments and when certain other requirements are met. 

Loan terms

Here are some important terms to know about Ascent’s undergraduate student loan:

• Fixed rates (APR): 4.79% – 12.76%
• Variable rates (APR): 1.64% – 9.23%
• Rate discount: 0.25% automatic payment discount
• Loan amounts: $2,001 – $200,000
• Repayment terms: 5, 7, 10, 12, or 15 years
• In-school repayment: Interest-only, flat $25, or deferred
• Grace period: 9 months
• Fees: Late payment fee

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Discover

Discover is one of the best-known names in banking and credit card services, but the company is also a top lender for private student loans. Undergraduate loans, as well as professional loans, are offered to eligible borrowers through Discover Bank.

Discover student loans are fee-friendly and interest rates are competitive. There are multiple ways to get interest rate reductions for added savings. And Discover rewards borrowers with a one-time cash reward on new loans when they meet GPA requirements.

Eligibility details

There are a variety of student loans available from Discover, including:

• Undergraduate loans
• Graduate loans
• Parent loans
• Health professions loans
• Residency loans
• MBA loans
• Law loans
• Bar exam loans
• Private consolidation loans

Discover prefers borrowers with higher credit scores and stable income. If you’re unable to meet those requirements, you may need a cosigner for approval. One thing to note is that unlike other private student loan lenders, Discover does not offer cosigner release.

Loan terms

Here are some important terms to know about Discover’s undergraduate student loan:

• Fixed rates (APR): 3.99% – 11.59%
• Variable rates (APR): 1.29% – 10.59%
• Rate discount: Discounts available for setting up automatic payments; and/or for signing up for interest-only payments
• Loan amounts: $1,000 – 100% of the total cost of attendance
• Repayment terms: 15 years
• In-school repayment: Fixed, deferred, or interest-only
• Grace period: 6 months
• Fees: None

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How to apply for community college student loans

Applying for student loans for community college can be stressful and it helps to have a checklist to follow. If you’re interested in getting a student loan, here are somenext steps you can take.

Consider your federal options first

Federal student loans are often the first place borrowers look for student aid, thanks to their low, fixed interest rates. In order to qualify, you’ll need to fill out the FAFSA. This form is used to determine your eligibility for federal student loans.

You can complete the FAFSA online at the Department of Education website. You’ll need your:

• Social Security number or Alien Registration Number (if you are not a U.S. citizen)
• Federal income tax returns, W-2s, and other records of money earned. (Note: You may be able to transfer your federal tax return information into your FAFSA using the IRS Data Retrieval Tool.)
• Bank statements and records of investments (if applicable)
• Records of untaxed income (if applicable)
• A username and password for the U.S Department of Education’s website, in order to sign electronically

If you’re a dependent student, you’ll also need the same information for your parents.

Once you submit the FAFSA, all the information you provided is used to determine whether you qualify for aid, what type of loans you can receive (subsidized or unsubsidized), and how much aid you’re eligible for.

You’ll get a Student Aid Report (SAR) that summarizes your application and provides an estimate of how much federal aid you’re eligible to receive. Keep in mind that you’re not obligated to accept federal loans.

You can use the SAR to decide what types of aid you want to use for school. Generally, you want to accept free money, such as grants or scholarships first, followed by work-study funding, and lastly, student loans. This reduces the amount you have to borrow and what you’ll repay.

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 you’ll need to apply for private student loans include:

• Social Security numbers for yourself and your cosigners, if applicable
• Personal information (i.e., date of birth, address, phone number, etc.)
• Income documentation, including pay stubs and/or tax returns
• Rent/mortgage payment information

You may also need to tell the lender where you’re planning to attend school and what kind of degree you’re 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.

Are student loans usually needed for community college?

Whether you need student loans for community college can depend on the cost. For the 2021-22 academic year, the average tuition with fees at two-year institutions nationwide was $3,800. If tuition and fees are higher where you plan to attend school, it’s possible that federal loans may not be enough.

To put the cost of community college in perspective, here’s a sampling of high and low averages from different states.

State	Average Tuition and Fees (Two-Year Colleges)
California	$1,430
New Mexico	$1,950
South Dakota	$7,240
Vermont	$8,600

Are there other financial aid options for community college?

Student loans can make it easier to pay for community college but there are other possibilities for funding your education. For instance, your state may offer grants or programs that will pay for some or all of the costs of attending a community college.

Eligibility can depend on your state residency status and enrollment status. You may need to complete the FAFSA and/or a separate state program application to take advantage of free or low-cost community college. Funding may be limited to one year of enrollment or may cover multiple years at community college.

Here are just a few of the programs that offer help with paying for community college.

State	Program Name	Features/Requirements
Arkansas	ArFuture Grant	Provides two-year funding to students who enroll in high-demand or STEM fields
California	California College Promise Grant	California residents who are first-time college students are eligible.
Delaware	Delaware Student Excellence Equals Degree (SEED) Scholarship Program	Open to high school students who are accepted at an eligible school and complete the FAFSA
Hawaii	Hawaii Promise Scholarship	Available to Hawaii residents or eligible students who qualify for residency-exempt status
Kentucky	Work Ready Kentucky Scholarship	Open to Kentucky residents who have a high school diploma or GED and are studying for in-demand fields
Kansas	Kansas Promise Scholarship	Kansas residents can apply and must agree to live and work in the state for two consecutive years after graduation.
Maryland	Maryland Community College Promise Scholarship	Open to Maryland residents who enroll in approved degree programs and complete the FAFSA
Michigan	Michigan Reconnect	Designed for older Michigan residents who have not yet obtained a college degree
Missouri	A+ Scholarship Program	Open to Missouri students who attend designated A+ high schools and meet other minimum requirements
Montana	Montana Promise Act	Open to students enrolled in tribal or community colleges in Montana who complete the FAFSA
New Jersey	Community College Opportunity Grant	New Jersey residents who have not completed a degree and are within household income thresholds can apply.
New Mexico	Opportunity Scholarship	New Mexico residents who plan to enroll in at least six credit hours at a public college or university in NM toward a training certificate, associate degree, or bachelor’s degree may qualify
Oklahoma	Oklahoma’s Promise	Open to eligible Oklahoma high school students who meet income requirements
Oregon	Oregon Promise	Oregon residents must have a high school diploma or GED and meet GPA requirements.
Rhode Island	Rhode Island Promise Scholarship	Covers high school diploma and GED recipients who attend the Community College of Rhode Island
South Dakota	Build Dakota	Open to in-state and out-of-state students attending eligible technical schools in South Dakota
Tennessee	Tennessee Promise	Tennessee residents are eligible; students must complete community service hours for each term enrolled.
Virginia	G3	Open to Virginia residents who qualify for in-state financial aid and have a household income equal to or less than 400% of the federal poverty level
West Virginia	West Virginia Invests	Open to West Virginia residents who have not yet earned a college degree

In most cases, scholarships and grants do not need to be repaid, so this is free money you can use to pay for school. When searching for grant and scholarship funding, be sure to consider national programs as well as state, local, and school-specific programs.

Make sure you borrow responsibly

Finding student loans for community college doesn’t have to be difficult if you know where to look.

However, when taking out student loans, whether federal or private, keep in mind that this money must be repaid with interest and in some cases, fees. So it’s important to only borrow what you need to pay for school to ensure that debt repayment is manageable and that you aren’t overpaying.