College Planning

Getting Student Loans is Possible with Bad Credit

If you have bad credit, you are still qualified to receive federal loans to help pay for college. This article lists a few federally funded and subsidized student loans.

Can I Still Get Student Loans With Bad Credit?

If you need help paying for college and have less than perfect credit, there is good news. Today, not only are there several types of federal student loans that are not credit-based, but federally funded, subsidized student loans generally offer one of the most flexible types of loans available.

Make friends with the FAFSA

To apply for the types of federal student loans that are not credit-based, you’ll first need to fill out your FAFSA (Free Application for Federal Student Aid). Note: This is an important step for any student, regardless of your financial situation. If you are a dependent, you and your parents will both need to provide the government with personal information such as your Social Security Number, recent federal income tax returns, bank statements, etc. If you are independent, you’ll only need to supply your own information. You can find a full list of required materials at FAFSA.ed.gov.

Stafford Loans and Perkins Loans are within your grasp

The subsidized Stafford Loan is need-based, and does not use your credit score to determine your eligibility. (Unsubsidized Stafford Loans are also available. They do not require a credit check, but are not need-based.) Stafford Loans are open to all legal residents of the U.S. who have been accepted or are currently enrolled in a college, university, or postsecondary education institution. While your credit score is not a consideration, it’s important to note that if you have previously defaulted on an older student loan, or you owe a refund to an old education grant, your eligibility may be affected.

The Perkins Loan is another need-based loan issued through your college or university. Perkins Loans funds are reserved for students who can demonstrate a significant need for educational financing, with the majority of loans going to families who make under $25K a year. As with the Stafford loan, your credit health is not a factor, but if you’ve defaulted on student loans in the past, that will hurt your chances of securing a Perkins Loan.

Know the difference between “subsidized” and “unsubsidized”

When you accept “subsidized” Stafford Loans, the government pays off any interest that accrues while you are enrolled in school. “Unsubsidized” loans are not subsidized by the government during your enrollment, and interest starts to accrue immediately. In both instances, you’ll typically begin making payments on your Stafford Loans nine months after graduation.

Consider a cosigner

If you have bad credit or no credit, finding someone with good credit who supports your educational goals to cosign on your loans, may change your eligibility status for a wide variety of private loans from respected private lenders. Being a cosigner has its risks, however (check out this handy list of “Important Things to Know When Considering a Cosigner” from SallieMae), the federal government’s low interest rates and flexible terms may be hard to beat, so if you do decide to shop around for private loans, be sure to weigh your options carefully.

If you’re left with lingering questions about student loans, you can find out more about how student loans work or how to get a student loan in the Protective Learning Center.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

Student Loans

Do you need help paying for college and have bad credit? The good news is that you have many options for how to pay for your college education that aren't based on your credit history. Today, there are many choices in student loans available that won't hold your credit history against you. With a little research, you can get the help you need to help you pay for your college education. For more information, visit the Protective learning center.

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