Company Name | Fixed APR | Variable APR | Min. credit score | Loan Amount | Loan Term |
Earnest | 2.99%-7.99% | 1.74%-7.99% | 650 | $5,000-$500,000 | 5-20 years |
SoFi | 3.49%-7.99% | 1.69%-11.98% | Not disclosed | $5,000 up to your cost of attendance | 5,7,10, 15, or 20 years |
Funding U | 7.49%-12.99% | None | Not disclosed | $3,001-$20,000 | 10 years |
MPOWER Financing | 7.52%-13.63% | None | Not disclosed | $2,001- $50,000 | 10 years |
LendKey | 3.50%-12.60% | 1.13%-11.23% | Not disclosed | $1,000-100% of your school-certified cost of attendance | 5, 10, or 15 years |
Education Loan Finance | 3.20%- 11.99% | 1.30%- 11.52% | 680 | $1,000- the amount approved by the school for qualified education expense | 5-15 years |
Prodigy Finance | None | 6.7%-14.5% | Not disclosed | $15,000 - $220,000 | 7, 10, 15 or 20 years |
Ascent Funding | 5.17%- 13.21% | 1.78%- 9.37% | 660 | $2,001-$200,000 | 5, 7, 10, 12 or 15 years |
What’s the Average Cost of Community College?
The Education Data Initiative found that the average cost of
community college is $7,460 total or $1,865 per semester. Here are some more
useful stats on the cost of a community college education:
- While tuition for an in-district community college averages
$3,400, the average cost of community college tuition for out-of-state students
is $8,210.
- The yearly tuition at a private 2-year institution can go up
to $25,000.
How Do Community College Student Loans Work?
Community college student loans are designed to help you
cover a variety of education expenses. These may include tuition, fees, books
and supplies, room and board, living expenses, and transportation. There are
two types of community college student loans: federal loans from the federal
government and private loans from private lenders.
Can Community College Students Get Student Loans?
Yes. Student loans are available to community college
students. But keep in mind that you must meet certain requirements for federal
and private loans. Most lenders look for a valid Social Security number, good
to excellent credit or a cosigner, and a low debt-to-income ratio. You should
also be enrolled or accepted in an eligible degree or certificate program.
Are Student Loans Usually Needed for Community College?
Whether you need student loans for community college depends
on the cost and your unique financial situation. If you don’t have the cash to
cover all of the costs of your education, student loans can come in handy.
How Much in Student Loans Can I Borrow for Community
College?
Most private lenders limit the amount you can borrow for a
community college loan. In many cases, it will be the cost of tuition minus the
amount of financial aid you’re already receiving. If you opt for federal
student loans, the maximum amount is $57,500 if you’re an undergraduate and
$138,500 if you’re pursuing a graduate degree.
What Are the Eligibility Requirements for Community College
Student Loans?
The eligibility criteria for community college student loans
depends on the lender. While some lenders have strict credit score, income, and
employment requirements, others are more lenient. You may come across a few
lenders who prioritize your academic and professional performance over your
financial situation.
Types of Community College Student Loans
While both federal and private student loans could help you
pay for a community college program, it’s important to understand these
differences.
Federal Student Loans
Offered by the Department of Education, federal student
loans feature fixed interest rates set by Congress. Plus, they come with a
number of protections, like student loan forgiveness programs and income-driven
repayment plans.
Since you can apply for federal student loans without credit
or income, they’re the most common college lending option. Many students pursue
federal student loans before private student loans. You can choose from the
following types of federal student loans:
- Direct Subsidized Loans: Direct subsidized loans are
designed for students who can prove they have a financial need. The Department
of Education will pay the interest on these loans while you’re still in school
and for the first six months after you leave. To be eligible, you must be
enrolled no less than half-time at an accredited community college.
- Direct Unsubsidized Loans: While you don’t need to show
financial need with direct unsubsidized loans, your college will decide how
much you can borrow. They'll look at the cost of attendance as well as other
types of aid you’re receiving to come to this figure. You will need to pay
interest and the interest will accrue if you decide not to pay while you’re in
school.
- Direct Parent PLUS Loans: The Direct PLUS program is for
parents of community college students. It allows parents to borrow up to the
cost of tuition minus any other financial aid. With these loans, interest will
accrue during any period of non-payment.
Private Student Loans
Since private student loans are offered by private lenders,
they come with their own eligibility criteria, rates, terms, and perks. But
they don’t offer any federal protections, like student loan forgiveness or
income-driven repayment plans.
Most private student loans are available through banks,
credit unions, and online lenders. If you don’t receive enough funding through
federal loans, grants, and scholarships, private student loans can help you cover
the gap.
Pros and Cons of Private Community College Student Loans
Just like all financial products, private community college
student loans offer benefits and drawbacks, including:
Pros
- High borrowing limits: Compared to federal student loans,
private student loans have higher borrowing limits. You can enjoy more cash
upfront to cover the costs of your community college education.
- Low interest rates: If you have strong credit and sufficient
income, you may be able to lock in a low interest rate. This can save you
thousands of dollars over the life of your loan.
- Flexibility to apply at any time: There is no deadline to
apply for private loans, like there is with federal loans. If you suddenly face
financial troubles, you’re welcome to apply for them.
Cons
- May need good credit: Many private student loan lenders look
for a solid credit history. If you don’t have one or a creditworthy cosigner,
your application may get denied.
- No federal protections: Federal loans offer protections,
like forgiveness and income-driven repayment plans that can help you repay your
student loan debt. These are not available with private student loans.
- Might have to settle for variable rates: Some private
student loans have variable rates. Since these rates can go up and down over
time, it can be difficult to budget for them.
How to Apply for Community College Student Loans
Follow these steps to apply for community college student
loans.
- Fill Out the FAFSA: Since it’s a good idea to apply for
federal student loans first, fill out the Free Application for Federal Student
Aid (FAFSA). Your community college will use the results from your FAFSA to
determine what federal student loans you qualify for.
- Apply for Grants and Scholarships: You don’t need to repay
grants and scholarships so it only makes sense to apply for them. There is no
limit to how many you can get so apply for as many as you can.
- Accept Federal Student Loans: Wait for a letter from your
college that explains what type of federal aid you’re eligible for. Then,
determine what options you’d like to accept.
- Decide If You Need Private Student Loans and Shop Around: If
your federal student loans won’t cover all of your community college expenses,
private student loans make sense. Do your research and compare rates, terms,
fees, and perks so you can find the ideal option for your unique situation.
- Apply Online: Once you hone in on a private student loan
that meets your needs, fill out the application. Most lenders will allow you to
do online.
Fund Your Community College Education with Private Student
Loans
Community college is becoming a popular option for high
school graduates and adults who are ready to pursue a new career. If you decide
to attend a two-year program, this handy list of the best student loans for
community college can come in handy. Before you commit to a loan, however, make
sure you weigh the pros and cons. Also, read the agreement carefully to avoid
unwanted surprises down the road.
