How Do I Choose the Best Community College Loans?

Community college loans can allow students to begin their college education without initial worries about financing. There are many different sources of community college loans, including governmental programs, private lending groups, and institutional financial aid programs. In order to choose the best community college loans, be sure to compare and contrast loan packages, and look for options that make repayment easier.

Many regional and national governments provide student loans for community colleges. In the United States, the fastest way to obtain government loans is by filling out the Free Application for Federal Student Aid, also known as the FAFSA. This annual application uses financial need and the costs of tuition to determine a loan package for both traditional universities and community colleges. In order to qualify for many governmental loan packages, a student must be enrolled at least half time, and cannot simply be taking single courses for personal education. For students working toward a transfer to a four-year university or a community college degree, federal or state student loans can be a good source of financial aid.

Private loans are sometimes available to community college students. Based on credit rating or collateral, these loans work much like regular private loans, though some may offer special deals for student borrowers. Private loans also may be an option for students who do not have an extensive credit history, but do have a parent or relative with good credit that is willing to co-sign the loan. Interest rates tend to be somewhat higher for private community college loans than for governmental funding, but they may be the best option for students that cannot qualify for government aid.

Community colleges sometimes offer their own loan packages for students with special circumstances. These loan opportunities vary by institution, and may not be available every year or at every community college. For short-term monetary problems, many community colleges offer small emergency loans to students, which allow them to cover necessary expenses without having to leave school. Financial aid and student services offices usually are the best resource for information about specific institutional loans.

Choosing the best community college loans requires some research and comparison shopping. Some loans include options that allow faster repayment, such as by paying interest while in school, or giving discounts for one-time payments or using paperless statements. Loans that allow income-based repayment options can also be very helpful for students who know that their starting income will be fairly low following graduation. Taking the time to estimate future payments based on repayment options and interest discounts can help students choose the best loans for their circumstances.