What if you can’t get a Student Loan

The number of students planning to attend college is falling due to the rising debt burden of student loans, the increased costs of attending college, and financial difficulties within families. Whilst the federal government loan program is available for each student to apply for, students become ineligible if their parents won’t give details of their financial circumstances on the FAFSA application. Both the government and the colleges have a policy of expecting a family with the means to contribute to the cost of their child’s education, and if they refuse to participate in the application process then the student misses out on the opportunity to obtain federal funding.

If the student then turns to private loans as an alternative choice they are unlikely to receive one without a good credit history of a willing co-signer. Thus a growing number of students have to look to alternate ways to fund college or give up their hopes of achieving a college education.

There are other options though to financing college, through student scholarships and grants. States often offer grants to students who attend a college within the state, whilst scholarships are widely available and under utilized. The student should consult with the financial aid officer at their chosen college who will help to assist in tracking down grants which may be applicable to the situation.

Many colleges offer excellent financial aid packages, some paying full tuition. However most still require an FAFSA submission to determine a parents expected contribution.  It is worth researching the financial aid offered directly by the colleges. Universities such as Yale and Harvard do not offer merit scholarships, preferring to focus on financial need as their aid criteria. An unwilling parent may be willing to complete an FAFSA if it meant entrance to such a prestigious colleges. Some private institutions and charitable trusts offer interest free student loans which can be searched for on line.

There are a number of colleges which offer a free tuition package to all their students who in return work at the colleges to cover the cost of their education. Berea College in Kentucky and the College of Ozarks in Missouri both offer students with financial need the opportunity to work, but are popular choices.

Peer to peer financing provides another option for students to raise the necessary finance to attend college. Students can sign up to sites such as Prosper and request a loan, citing their reasons, and if granted a loan repayments will be set over a given period. Another option is to request funding via Sponsor My Degree, but there is no guarantee of success. When searching for alternate sources of finance it pays to be cautious. Funding previously made available through My Rich Uncle is no longer available as the company went into bankruptcy.

If these choices to fund college without a student loan are not available to you then it is logical to take some time out and work to build up a college fund. Working through college is a viable option and statistically students who do work their way through college do better academically than those who don’t. Most instate schools offer lower tuition rates than out of state colleges, and those with work experience can present as better employment prospects after graduation. It is worth approaching businesses to see if there are any sponsorship programs available to help towards costs. If funding is still an issue you can apply for a student loan from the FAFSA without parental co-operation from the age of 24, giving you a great opportunity to save in advance to meet most of the costs.

Exploring these various avenues takes time, so if you believe that obtaining a student loan may not be an option then start to research financial aid packages, scholarships and grants at the earliest opportunity. Work to achieve the best grades you can to be eligible for scholarships. If you can raise the funds to obtain a degree without resorting to student loans you will have the advantageous position of graduating without student loan debt.