Funding a college education is starting to become a bit more difficult. A recent article from Forbes said that the most expensive colleges charge a tuition of $60,000 a year, an amount that is forcing students to raise tuition anyway they can. From working two jobs to asking family members for money, bankrolling your college education takes some work. Even applying for student loans can feel like a challenge.
From talking to a school's financial aid department to meeting with private lenders, scraping together enough cash for tuition can be taxing. The struggle to find college funding can be especially hard for those who have bad credit. A good credit score will make all the difference when applying for loans. But there are some student loan options out there for those with less-than-ideal credit.
The most common type of loan for a student to take out is a Stafford loan, which can be issued by a financial institution or the government. Stafford loans are organized into two categories: subsidized and unsubsidized. For a subsidized loan, the government pays the interest, whereas a student is responsible to pay interest on an unsubsidized. Stafford loans are appealing to those with little or poor credit because the lender will not look at credit history.
Although these types of loan are great for those with a low credit score, there are some drawbacks. For example, if a student is currently in a default with another student loan, they will not be able to qualify for a Stafford. In addition, these loans have a limit of how much you can borrow.
Students who have borrowed the maximum amount allowed by a Stafford loan can apply for Parent Loans for Undergraduate Students loan. Like government funded loans, PLUS loans do not look at credit history, but they do come with some restrictions. Those who have adverse credit – meaning, they are in default on a loan or 90 days past due on a payment – will not be able to take out a PLUS loan.
Funding your education is a lengthy process, but it is not an impossible feat. While bad credit can make it harder to qualify for loans, there are a few options out there that can help you pay for your tuition.