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Yes, you can get student loans for community college!

There are two ways to do this: by applying for a federal loan, or by applying to your state’s loan program. Both of those options are available to students who are enrolled at least half-time, and both require you to fill out the Free Application for Federal Student Aid (FAFSA).

If you’re interested in a federal loan, there are several options available, including Perkins loans and Stafford loans. These loans have different eligibility requirements based on your income level and whether you’re attending school full-time or part-time. If you apply for a Perkins loan, it’s possible that your parents’ income will be considered when determining how much money you receive. The Stafford loan has no parental income requirement at all!

The state programs vary from state to state; some states offer grants instead of loans while others offer both types of funding. You can find out more about each program by visiting the website of your state government or by contacting them directly.

How to get a student loan for community college

More students are choosing community college in the wake of coronavirus. Here’s how to pay for it. (iStock)

Following the spread of coronavirus, many college students have taken steps to change up their education plans as they struggle to manage sudden financial hardships. Specifically, more students are seeking schools closer to home and considering a two-year college over the traditional four-year option, which begs the question: What to do about their school loans?

After all, these schools are still a financial commitment. Fortunately, the process of paying for college is largely the same, no matter which type of educational programs you choose. Read on below to learn more about how the pandemic is affecting college planning, as well as students’ chances of receiving financial aid.

The process of financing a two-year college degree

Even though a two-year college degree costs much less than other options, there’s a chance that you still may need to finance all, or part of, your education. With that in mind, here is a closer look at how the process works:

Applying for private student loans 

If your community college does not accept federal aid, or if you’ve already reached your federal student loan limit, your best bet will likely be to apply for a private loan. However, private student loans don’t have income-based repayment options or as many deferment options as federal student loans.

If you decide to go this route, you’ll want to be sure to check rates from private lenders and make sure that you understand the loan amount and any terms before signing on the dotted line. Credible can help you to compare loan programs without affecting your credit score.

Applying for financial aid 

The process of receiving federal student loans to go to community college is the same as it would be for a four-year institution. You need to fill out a loan application — specifically, the Free Application For Federal Student Aid (FAFSA).

The form needs to be filled out each year that you intend to apply for government loans and it uses information about you and your family to determine what, if any, government loans or grants match your needs.

It’s important to note that not all two-year colleges accept federal student loans. In fact, according to the Community College Review, these loans are unavailable at around 20 percent of two-year public schools. With that in mind, you’ll want to check in with your community college before you apply.

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Additionally, be aware that there is a limit to how much federal student loan assistance you can receive. The limit is $31,000 for dependent students, or those whose parents still support them financially, and $57,000 for independent students.

That limit stays the same throughout the course of your education, so be aware that if you do use some federal aid for community college, you will have less money to work with when it’s time to apply to a four-year school.

How the CARES Act will affect financial aid

Part of the federal government’s CARES Act was designated to provide additional aid to students. Of the $14 billion that was designated to go to colleges and universities, $6 billion will go directly to student financial aid for the coming school year.

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As for how this money will affect financial aid, it depends on the institution. Some are using the funds to provide extra assistance to the students most in need and others are using it to provide extra scholarships and work-study grants. You’ll want to check in with your local community college to see if they’ve received aid and how they are choosing to allocate the funds.

Choosing a two-year college can be a cost-saving measure

For many, choosing a two-year college is about reaping cost savings. According to the College Board’s 2019 Trends In College Pricing Report, the average cost of attending a public, two-year community college when you’re in-district was just $3,730 for the 2019-2020 school year. In comparison, that same year, attending a four-year in-state institution cost $10,440 and a private four-year school cost $36,880.

While that cost differential — and the amount of student debt it can lead to — is significant on its own, it’s even more pronounced at a time when unemployment numbers are high and students aren’t allowed to have the traditional college experience due to stay-at-home measures and social distancing.

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As Pierre Huguet, CEO and co-founder at H&C Education, an educational consulting agency in the New York City area, puts it: “Distance learning is definitely not the ultimate college experience. Many of my students keep telling me, ‘This isn’t what I signed up for!’ and they’re right. Remote learning just isn’t as exciting or fulfilling as a campus experience that allows students to interact with peers and faculty.”

He also says, since the process behind remote learning is largely the same, no matter which institution you choose to attend, many of the families  he works with are balking at the idea of paying full tuition.

Instead, they’re looking at community colleges and associate’s degree or certificate programs as a way to save money and to take care of general education requirements before eventually moving on to another school.

Loans for International Students

Borrowing money through a private, legal lender is the best way to afford school without involving the mafia. Numerous companies lend to U.S. citizens, but those that lend to international students are fewer and further between. 

Most lenders require international students to get a loan with a cosigner who is a U.S. citizen or permanent resident. This gives the lender security in case the borrower can’t afford to pay back the loan or leaves the USA. Unfortunately, it also limits who is able to get a loan, as some potential borrowers may not have family or friends in the USA who are willing or financially able to act as a cosigner.

Loan terms

Even when you do find a lender willing to provide student loans for international students, it’s important to consider the loan rates, since they’ll affect you for the next many years. Private student loans are usually credit-based, as opposed to federal student loans using FAFSA, and provide either variable interest rate loans or fixed interest rate loans. Variable-interest loans, which are also known as floating-rate loans, provide loan terms that change depending two factors: The benchmark is usually based on the London Interbank Offered Rate (LIBOR) or another federal rate, while the fixed spread evaluates a borrower’s likeliness of repaying the loan. Variable-interest loans are risky, since, unlike diamonds, the rate isn’t forever; even if a low LIBOR at the start gives you a low-interest rate, if LIBOR increases, so does your interest rate. By contrast, fixed-interest rate loans remain the same throughout the course of the loan, but of course this can also be risky, because if a borrower starts with a high rate then that rate will remain high throughout the tenure of the loan.  

As you start doing the math, you should also take into account other terms of the loan that might affect when you pay and how much you pay. Is there a grace period before you have to start repaying the loan? Are there penalties for prepayment or paying back the loan early? Are there late fees? What’s the actual process for paying every month? Can the terms of the loans be changed? And when will you be able to afford doing fun things again?

Refinancing your loan

What happens if your interest rate is so high that you’re having trouble paying back the loan? You can refinance. 

Refinancing gets you a new loan with a lower interest rate and/or lower monthly payments, or lets you switch the type of loan you have. To be clear, borrowers who are able to get their loan refinanced will end up repaying their loan for a longer period of time than the terms of their original loan, but will end up paying less money overall so it’s still a good plan. 

Where to get a loan

Below is a list of some of our favorite private lenders. Whether you apply to one of these or to another company you find yourself, don’t forget to look closely at the terms of a loan before you sign anything. If you’re going to be paying someone back for years, you might as well be comfortable with how you do it.

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MPOWER Financing

MPOWER Financing provides loans to international students studying in the USA or Canada based on their future income potential and without requiring a cosigner or checking for a good credit history. It offers fixed-rate interest rates to students in any field of study as long students are accepted or enrolled in one of the 350 schools supported by the company and are in their last two years of study. Other benefits include a six-month grace period after graduation to start repayment of loans, and a 1.50% discount on the interest rate if borrowers meet certain requirements. It also provides career support services.

Ascent Student Loans

Ascent is an award-winning private student loan company that gives students more opportunities to pay for college with or without a cosigner. Ascent offers affordable rates, no fees, flexible repayment plans, and exclusive benefits (such as 1% cash back, scholarships, a Refer A Friend Program, a Rewards Program, and more).  Check your pre-qualified rates in 4 easy steps without impacting your credit score.

Discover Student Loans

Discover Student Loans is run by Discover Bank, and it provides student loans to international students who attend an eligible school in the USA. Loan terms and conditions require a cosigner but do not charge any fees or require payments while students are still in school. Plus, loan amounts from Discover can cover up to 100 percent of education costs, so some lucky borrowers will be able to cover their total cost and won’t have to research additional sources of financial aid.

Prodigy Finance

Prodigy Finance offers variable-rate loans to students in business, engineering, law, public policy, and medical programs who attend school in a country that is not their home country. Instead of requiring a cosigner, Prodigy provides loan and repayment terms based on its predictive credit model, which assesses more than 150 variables that determine how much each applicant can afford after graduating.

Sallie Mae

Students getting an international education in the USA are eligible to get a loan from Sallie Mae as long as they have a cosigner. Though Sallie Mae doesn’t provide personalized interest rates until an application is completed, they do advertise discounts when borrowers choose in-school repayment and paying by auto debit. There are no origination or pre-payment fees, and borrowers may be able to pay only interest for the first year after graduation. 

Wells Fargo

International student loans abound at Wells Fargo, which provides loan products for both undergraduate and graduate students at an eligible school. Borrowers aren’t required to start payments until six months after graduation but are able to do so without penalties while still enrolled. Wells Fargo also doesn’t charge application or origination fees, but it does require a cosigner for international students who apply for a loan. Graduate students must also have an established credit history in the USA to be eligible.

So, what have we learned?

You can get student loans for community college. You just have to be careful about how you go about it.

Make sure you know what kind of loans you’re applying for and why they’re right for your situation. Don’t forget to consider other financial options, like scholarships, grants, and work-study programs. And make sure that the school is accredited by an agency recognized by the U.S. Department of Education (like NACES).

When it comes down to it, don’t be afraid to ask questions! If something doesn’t seem right or doesn’t seem like it fits with your specific needs and goals, don’t be afraid to look around until you find something that does—and then apply!