Student Loans And Not So Good Credit
College costs in today’s economy are through the roof and are only expected to go higher in the future. Most college students and their parents will need to take out some type of student loan to fund those ever increasing tuition bills, but what if an college student or there parents have poor credit? Are there any college student loan programs that do not require a credit check to determine eligibility, or that will lend to a student with bad credit?
Fortunately, the answer to both of these questions is yes. Financially speaking, every college student who wants to attend college in the United States should be allowed to go. Thanks, in part, to the federal college student financial aid program.
Federal College Student Loans
Federal college student loans are those loans that are provided to college students or their parents by the federal government for the expressed purpose of funding there education. For the college student with bad credit (or any college student for that matter), your first step should be to file for the Free Application for Federal Student Financial Aid (FAFSA).
Through this one application, you are applying for every form of federal financial aid for which you might be eligible. This is perfect for college students with less-than-perfect credit, because the federal financial aid assistance program is designed to make it possible for all college students to afford college.
Your credit will not taken into consideration when you apply for federal financial aid assistance because the government understands that most traditional college students have not yet been given the opportunity to build their credit. The same eligibility requirements will apply even if you have had the opportunity to build your credit (and have mismanaged it), or if you are a non-traditional or graduate college student.
Federal financial aid assistance may come in the form of student loans or grants, some of which are offered specifically to the college student with the most financial aid need. Federal Stafford College Student Loans (especially of the “subsidized” variety) and Federal Perkins College Student Loans are two such common student loans.
Federal financial college student aid assistance is available to almost everyone without regard for credit. Federal college student loans also do not require a cosigner, so they are a great option for the student who may not be in a position to ask a parent to cosign. The same standards will apply to state sponsored college student loans.
The only situation in which your credit may be considered as part of your eligibility for federal college student loans is if you have a default on a previous student loan. Still, the requirements are much more flexible for federal college student loans than for a private college student loan.
Sources that offer private college student loans, such as banks, credit unions, or community groups, will consider your credit worthiness when determining your student loan eligibility. While poor or bad credit might not automatically take you out of the running, you will probably need to obtain a co-signer with good credit in order to obtain a student loan.
Some providers of private college student loans may take factors other than your credit (or the credit of your co-signer) into consideration. For example, if you are going into a field in which a large earnings can be expected, then you may have a better chance of obtaining a private college student loan with poor credit.
