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| Guide to Finding an Alternative Student Loan |
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Although US Department of Education student loans are the most
common form
of financial aid, sometimes families find they need
an alternative student
loan to get their children through
college. For one thing, competition is
rising to secure the
limited number of federal student loans, and if your
application
is not received early, you might not receive any aid. At the
same time, the maximum loan amount available through a Stafford
loan has
stayed the same for over ten years, while tuition costs
continue to soar.
Furthermore, most federal student loans
presume that parents will foot part
of the bill, but some parents
are unable or unwilling to contribute to the
student's education
fund, leaving even more money for the college applicant
to come
up with. If federal student loans are not enough to cover a
college attendee's bill, then he or she needs to find an
alternative
student loan.
The most common form of alternative student loan is the
private
loan, which is offered by banks and other lending institutions.
Students with poor or no credit might require a co-signer on the
loan,
however, and alternative loan rates might not be as stellar
as with
Department of Education loans. The financial aid office
of most universities
will be able to help students find a banker
that offers an alternative
student loan at a fair interest rate.
The personal bank of the student's
parents might also offer
educational loans. Young adults searching for an
alternative
student loan should be very careful to read the fine print of
any
private lender and to shop around to receive the best rates.
Of
course, before signing on the dotted line, students might
consider ways to
avoid an alternative student loan altogether.
Some creative ways to lower
college costs include researching
accelerated study courses which take less
time to earn a degree,
attending a less expensive community college for the
basic
credits and then transferring to a more prestigious school for
the
last few years (and the precious degree), and scholarships.
There are
oftentimes more scholarships available than people
realize; a local grant
may be enough to bring college expenses to
a manageable level. There are
even colleges that charge no
tuition at all, requiring instead that their
students work a few
hours a week at jobs related to their course of study.
Not only
is this a way to secure an inexpensive education, but it also
provides valuable experience in your field. Finally, some
investment
groups offer creative ways to fund college by banking
on the student's
future earnings. They will pay the college
costs in exchange for a
percentage of future earnings (usually
between 1% and 4%) for a fixed
period.
Whether you finance your college fees through alternative
student
loans or simple ingenuity, there is no reason today for tuition
costs to hinder students from receiving an education. Even if
federal
student loans do not seem to be enough, there are many
ways to get an
excellent education and to secure a brighter
future.
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