How To Find College Loans

College Degree Finder

The recent economic downturn has decreased access to credit for student loans. With recent proposals for the federal government to take a bigger role in the student loan market, obtaining loans for college could even become more difficult. However, those interested in attending a state-funded school more than likely will have the ability to borrow some money to cover their education expenses.

Students are taking more responsibility for obtaining their loans, traditionally a role of parents. Before applying for student loans, review the following information:

Deals For Students

Apply for aid from the federal government before you seek other sources of funding. To apply, you must first complete a Free Application for Federal Student Aid (FAFSA).


Undergraduate students can sometimes borrow money for education through a federally subsidized or unsubsidized Stafford loan (depending on the student’s demonstrated financial need) for up to $12,500 per year, depending on degree level and year in school. Eligibility for the Stafford loan is not determined by credit. Stafford loans for 2014-2015 academic year have a low annual fixed interest rate of 4.66%. Cumulative loan limits are $31,000 for dependent students and $57,500 for independent students.

Individuals without the means to attend college can qualify for Perkins loans, interest-free loans during the duration of college, and 5% percent after enrollment has ceased. The majority of student unable to pay for school can receive subsidized loans while enrolled in school, with a low 5.6% interest rate when the student is no longer enrolled.

Not Enough Money?

If you considering quitting school before you have earned a degree, you must remember that it could be more costly in the long run. If you obtain your degree, you will more than likely be able to get a higher paying job than you currently have. If you are looking for alternative funding sources, review the following information:

Charities and Colleges

Some colleges are beginning to offer loans directly to students. If you do not want to borrow from a school offering students loans, some charitable organizations offer loans where no interest is charged.

Alternative Loans

If government subsidized loans are not enough, you can borrow money from a bank. However, you will probably be charged a higher interest rate that can be raised over time, and these loans are often harder to obtain. Many banks will only provide loans to people with credit scores in the 700’s or higher. If a student does not have a high credit score, banks will often require a cosigner.

Options for Parents

If your parents are willing, they can obtain loans to help you fund your education. There are numerous programs specifically for parents with children attending college.

Federal Loans Are No Bargain.

Parents who obtain government sponsored loans for their children are charged higher rates of interest. These loans are known as PLUS loans, and parents deciding to finance their children’s education this way should expect to repay the loan with an annual interest rate of 9.4 percent. The federal government also provides parents with other options and incentives if parents repay loans utilizing automatic monthly electronic deduction payments. Parents utilizing this option can repay loans with a rate as low as 8.55 percent.


Parents who do not qualify for PLUS loans can obtain loans from non-profit organizations. Likewise, many colleges provide loans to parents with low incomes.

Banks and Private Lenders.

Parents can also obtain private student loans from banks to fund their children’s education. However, as with students obtaining private loans in their names, these loans are affixed with high-interest rates that can increase in time.

If you are considering private loans to fund your children’s education, search the web and learn about all the options available to you and different rates being offered by banks.

Home equity loans. If you have equity in your home, and can obtain a home equity loan at a reasonable rate, this is an option you can consider, especially if the rate you are offered is lower than rates for PLUS or private loans.