Student Loans for Community College

student loans for community collegeWhen it comes to cost-effective methods of getting college credit and working towards a degree, community colleges offer a pretty compelling opportunity to students who are looking to learn and save at the same time. The American Association of Community Colleges suggests that community colleges provide a vital path to education particularly for nontraditional students: per an Association report, the average age of a community college student is 29. Many of these students need to restart their education before committing fully to a full college or university experience.

Students who choose to go to a community college for a year or two will notice that costs are much lower than at standard educational institutions. Lower costs are always preferred, and this can especially help if a student has cash flow concerns. In New Jersey, for example, the cost of undergraduate tuition topped a reported $40,000 in 2013, while a full-time student in a community college in the state might be asked to pay a reported $4,000.

Even so, there are some students who simply can’t afford to pay tuition at a community college. They might have:

  • Children to feed
  • Car payments to make
  • Mortgages to pay

It’s difficult to be successful in a challenging job market without a college education, but then again, it’s difficult to pay for a college education when the job market and economy on a whole is poor. Community college students can combat this catch-22 by choosing both a lower-cost option by going to community colleges, and also by considering student loans for community college.

Federal Loans

Student-LoanStudents who demonstrate financial need will usually benefit from receiving subsidized loans provided by the federal government. These loans are offered at a very low interest rate, and the government picks up the tab for the interest that accrues while the student is in school. While the student is required to pay the loan back, the combination of free interest and low interest can significantly reduce the financial burden a student can face while getting a degree.

Federal student loans are generally very favorable to borrowers, especially when compared to their private counterparts. The interest rates are generally lower and are fixed, and subsidized federal loans provide student borrowers with some breathing room, as there are no interest charges while a student is enrolled in school at least on a half-time basis. There is also a grace period, usually of six months, during which students do not need to make payments on the loan, and when interest does not accrue.

Not all federal student loans are subsidized. In fact, there are some federal student loans that still come with low interest rates that aren’t tied to a student’s financial need. These loans might accrue interest during the student’s time in class, but some of these loans offer deferment packages that allow students to put off repayment until the loan is complete.

Not All Colleges Participate

While federal loans could be right for some students, not all community colleges participate in the federal student loan program. In fact, a report produced by the Project on Student Debt suggests that about 9 percent of students are enrolled in community colleges that don’t accept federal student loans. Students hoping to get federal help with their student loans for community college should make sure that their school of choice participates in the federal student loan program.

In some instances, students may wish to apply for private student loans, either in lieu of or in addition to federal loans. Borrowers should always exhaust their federal student loan options before turning to federal loans, but sometimes, students need to use a private loan to cover the full cost of their education. There are far more private loans than there are federal loans, and so it’s important to make sure you understand your options before borrowing.

Some community colleges partner with private lenders, and these colleges provide students with a list of loans they can apply for. Visiting the student aid office at the school could be all a student needs to do in order to find out more about what money is available. But the best option is to shop around and compare multiple loan options, in order to make sure you find the loan that best suits your financial need.

Private Options

A whole bunch of factors can vary from loan to loan, including:

  • Interest rate
  • Associated fees
  • Payment start dates
  • Length of repayment term

Loan providers are required to disclose each and every detail about the loan, including how much the entire loan will cost if the student makes each payment on time, and what will happen if the student misses payments. Asking questions, taking notes and getting help from the financial aid office are excellent ways to ensure that the loan research and application process goes smoothly.

Other Options

Federal and private loans aren’t the only ways students can pay for their education at a community college. Some states have specific programs that can benefit residents, while some schools offer loans to people of a specific ethnicity or culture. Some credit unions even offer discounted student loans for community college, with very few fees. Investigating those options might also be an excellent investment of time.

Students who are unemployed might also qualify for educational programs through the federal government. TIME reports that the federal government has given community colleges $2 billion in order to retrain workers for the new economy. Some schools are using these funds to develop new programs, while others are using the funds to educate people at no charge at all. Unemployment offices and community college financial aid offices should have more information on these programs.

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Types of Student Loans