When you think of student loans you automatically think that they are difficult to acquire if you have no credit rating.  This is not to say that student loans are easy to obtain in this economy however, it is possible to acquire a loan without a cosigner if you know where to look.  Your options will be slightly more limited than loan sources that require a co-signer but not impossible.  Here are a few tips on how to get started:

Research Loan Sources

Create a file and start researching student loan sources that do not require a co-signer.  For the most part, you will find that these are loans that are usually backed by the federal government such as a subsidized or unsubsidized Stafford loan or a government Perkins loan that does not require the borrower to have a credit history.

Make note of each student loan that you find that does not require a co-signer and review the interest rates, repayment plan, lending criteria, and other information so you can compare multiple resources.  This will help you to find the right student loan that best suits your needs.

Complete a FAFSA Application

FAFSA stands for Free Application for Federal Student Aid and is the main application that is used to apply for student loans that are backed by federal funding.  When you complete a FAFSA application it will open up doors for receiving federal monies for a college education without a cosigner.  It may also open up possibilities for grant money that you will not be required to repay.  Depending upon the state in which you live a FAFSA application will also help you to locate funding that is available from your state of residence.

You can obtain a FAFSA application by accessing fafsa.ed.gov or by visiting your high school guidance office or college financial aid office.  If you fill out and submit a FAFSA application online you can establish an account where you can easily log in and track the progress of your application.

At the present time the two main government loans that do not require a cosigner include the Stafford loan that is subsidized for students in need which means that the government funds the interest while you are pursuing your degree, during the grace period after you complete your degree, and during deferment should it be necessary for you to delay repayment.  The unsubsidized Stafford loan does not cover the interest while you are in school so it is likely that you will be eligible for the subsidized Stafford loan.

Another government funded loan that does not require a cosigner is the Perkins loan.  When you fill out a FAFSA application you can apply for a Perkins loan which is backed by the federal government and provides for a longer repayment period.  You may also want to consider an ACS loan which is handled by Affiliated Computer Services, a Fortune 500 company that covers business process outsourcing and is the primary outsourcing company for the federal government and federal student loan programs.

If you are a non-traditional student you may have more options in terms of additional scholarships and grants.  It is worth your time to find out and will help you to reduce the amount you owe when you complete your degree.  Meanwhile you should continue with the FAFSA application which may open up additional doors for funding.

Benefits of Student Loans without a Cosigner

There are many advantages of obtaining a student loan without a cosigner which include low interest rates, flexible repayment terms, the ability to consolidate student loans, and interest rate that is tax deductible.  Additionally, if you are a student that demonstrates financial need there may other funding that will be offered to you when you apply for a student loan without a cosigner.

As you can see, it is possible to acquire student loans without a cosigner.  Student loans that are funded by the federal government are available for almost any student to make a college education possible and they do not require a cosigner.  In fact, over the long term it is much easier to pursue this route than to try and obtain a private student loan from a private lender.  The requirements or more stringent, the interest rates are typically higher, and you almost always need a cosigner.

As an added tip, continue to look for grants and scholarships even after your loan has been awarded.  The less you owe when you complete your college degree the faster you will be able to pay off your student loans.

The poor economy has compromised the credit rating of a lot of people usually through no fault of their own.  If you are in the percentage of people that has poor credit there is no need to give up on your dreams of acquiring a college degree or putting your children through school.  There are a variety of student loan options that are more interested in funding a student’s education than they are in your credit history.

Student Loans with Federal Funding

The best student loan option to consider first is federally-funded student loans.  These are government guaranteed loans that are based on financial need.  If you qualify for the loan from the financial need standpoint then you will be awarded the loan regardless of your credit rating.  Additionally, you will be better off over the long term since the interest rates are lower when it comes to student loans that are backed by the federal government.  So what are some of the student loans that you can acquire with bad credit?

• Student Loans provided by the State:  Depending upon the state in which you reside the governments in some states collaborate with student loan sources to provide a combination of state and federal funding for students with a financial need.  Again, these loans are based on financial need and not your credit history.

• Stafford Loan:  This is a loan that is funded by the federal government and is offered as a subsidized or unsubsidized loan arrangement.  The subsidized loan provides funding for students in financial need and the unsubsidized loan is available to any student.  With a subsidized loan the government funds the interest right up until the time that repayment commences and during deferment.  The Stafford loan also offers flexible repayment terms over a standard period of ten years or longer.

• Perkins Loan:  This is also a federally-funded loan that is typically offered in smaller amounts than the Stafford loan to both undergraduate and graduate students who demonstrate financial need.  Instead of emphasizing your credit score, if you are in need of financial assistance then you will qualify for this loan.

• PLUS Loan:  The PLUS Parent Loan is available through credit unions and financial institutions that also provide Stafford loans.  Parents are allowed to borrow money for the student’s education regardless of financial need to assist with financing a college education.  The loan is insured by the lender and then again by both the state and federal government with a variable rate of interest.

• Disadvantaged Student Loans:  This is a loan that is offered by the Department of Health and Human Services that you can acquire through the financial aid office at the educational institution you plan to attend.  The loan serves students who are pursuing a degree in the health sciences and are at a financial disadvantage.

•  Guaranteed Personal Loans:  There are some lenders that offer a Guaranteed Personal Loan which has less stringent criteria for getting approved.  The lenders of GPLs often have a large client base of people with questionable credit and are more likely to work with you than a private lender.

The student loans that are federally-funded can be easily applied for with a FAFSA application which is the Free Application for Federal Student Aid.  The application can be obtained from fafsa.ed.gov and will allow you to discover what loans you qualify for regardless of your credit rating.  If you can combine government loans with scholarships and grants you should not have to consider private loans which place a heavy emphasis on your credit history.

Consider a Cosigner

If it is necessary to consider a private loan to fund a college education see if you can find a cosigner that has an excellent credit rating.  Although you may receive the loan with bad credit it is likely you will pay a much higher interest rate than a federally-funded student loan.  Additionally, interest begins to accumulate as soon as the loan is awarded.

Reduce Your Debt Ratio

If you must consider a private loan and have a poor credit rating you may want to consider reducing your debt-to-income ratio.  If the ratio is out of balance it means that you have more expenses than the total amount of income you bring home.  A high debt-to-income ratio is considered to be a credit risk by most lending institutions however, if the institution sees that you have made an effort to bring the ratio back into balance, you stand a better chance of being approved for a student loan.

Although refinancing a student loan makes good sense you can find yourself bogged down with an endless supply of paperwork if you have never refinanced anything in the past. The more aware you are of how to effectively refinance a student loan the fewer the hassles will be and the better you will be able to cut through a lot of the red tape. Here are a few basic essentials on refinancing a student loan:

Assess Your Situation

Before you listen to advice from anyone take the time to assess your situation to determine exactly what loans you owe and the type of loans, government or private, which you have. Organize the loans in terms of interest rates and the costs you will incur when repaying each loan. Research loan consolidation programs and then calculate what it would cost you to satisfy your loans if you consolidate them into one payment. Do a cost comparison to see if it is worthwhile to refinance before you start seeking the advice of third parties. The advice will be more meaningful if you have a handle on your situation in advance of your meeting.

Government vs. Private Loans

If you are considering consolidation as a refinancing option keep in mind that if you have a mix of federally-funded student loans and private loans you cannot combine them into one consolidated loan. This is an important point to consider when refinancing student loans. If you do have a combination of federal student loans and private student loans it may be necessary for you to seek two different consolidation programs if you are considering refinancing. Make sure you review the criteria for each program as well as the advantages to ensure it is the best fit for your financial needs and requirements. It is important to take your time with this step since you can only refinance once according to laws enacted since 2006.

Stay Updated on the Interest Rates

When you refinance student loans you are only allowed to take advantage of interest rates once. In the past, student loan borrowers could refinance multiple times to take advantage of interest rates when they were falling. As of 2006, you can only refinance your student loans once but you can add additional student loans at any time. This is why it is important to keep an eye on the interest rates and when you think they will be at the lowest point then lock in your loan at the new rate. If you are refinancing a federal student loan you will want to keep an eye on the rates that change once every year during the month of July. If you are unsure of whether or not the interest rates will remain low then you can simply lock in the current interest rate and refinance your government student loans.

Keep Your Credit Rating in Shape

Before you consider refinancing a student loan make sure your credit rating is in good shape and that you have made payments on anything you owe on time. More often than not, student loans that are refinanced depend upon your credit history to calculate interest rates and to determine your eligibility for refinancing.

Refinance During the Grace Period

Once you complete your college degree there is a six month grace period before you are required to start making payments. This is a good time to consider refinancing your student loan because it can possibly save you almost 50 percent and will last for the term of the loan. Also, if you begin making payments on the loan during the grace period this will also help to reduce the length of the loan.

Inquire about Loan Incentives

When you are researching different options for student loan refinancing remember to ask the lender if they offer and special discounts that will save you money over the long term. Some lenders will offer incentives for making payments in a timely manner or for setting up an automatic payment option. The incentives often include a reduced interest rate and other discounts that will vary for each lender.

Refinance Fees

When you are in the process of considering different lenders for refinancing your student loan, check to ensure there are no additional fees required by the lender to refinance your loan. At this point you should also check for any hidden fees to ensure you do not have any surprises when your loan is approved. If you keep some of these tips in mind when refinancing your student loan it should be relatively easy to get approved for financing as well as help you to save money over the long term.

Federal student loans are offered by the federal government to help those in need to fund an education.  There are two types of federal student loans which include subsidized and unsubsidized both of which are offered at low fixed interest rates and are based on specific requirements for eligibility and financial need.  These types of government loans are also known as Stafford Loans and may offer you a solution if you are seeking to fund your education.

Subsidized Stafford Loan

A subsidized federal student loan allows you to borrow a portion or the entire amount it will cost for your education.  The government will fund the interest that is accrued on the loan while you are earning your degree and for the grace period that follows degree completion.  For a subsidized loan the grace period is typically six months and if you are given permission to postpone repayment the government will also fund the interest during this time period.

• Eligibility:  The basic requirements for subsidized loan eligibility include U.S. citizenship, eligible degree program enrollment, and a high school diploma or GED.  It is also necessary to maintain a certain GPA, you must have a clean record in terms of federal grant repayment if applicable and you cannot have any drug offenses on your record.

• Advantages:  Some of the advantages of acquiring a subsidized federal loan to fund your education include government funded interest while you are working toward your degree and are in school at least part time, easy maintenance of subsidized status as long as you are in an approved program, and no payments for six months after you have completed your degree.

• Disadvantages:  When you acquire a federal subsidized loan there are specific limits on the loan on an annual basis, the amount you are allowed to borrow varies according to your status as a student and your grade level, and the fees that accrue with your loan are automatically subtracted from each disbursement that is paid out to you.

You can apply for a subsidized federal student loan by completing a FAFSA form which is a Free Application for Federal Student Aid.  It takes a little time to completely fill out this form as it is quite lengthy.  You can obtain the form online at fafsa.ed.gov or any school guidance office or college financial aid office.  If you apply online you can also submit the application for review through the use of a personal identification number.  Once you establish an account you can check on the status of your application by logging into your account online.

Unsubsidized Stafford Loan

An unsubsidized is different from a subsidized loan since the federal government does not fund the interest that accrues on the loan while you are in school.  The interest is also not funded during the grace period or if you opt to postpone the payments with authorization.  This type of federal student loan is also not offered to student based on financial need.

• Eligibility:  The eligibility for an unsubsidized loan is basically the same as a subsidized loan and requires U.S. citizenship, enrollment in an approved degree program at least part time, a high school diploma or GED, and a clean record in terms of federal grant repayment provided this is applicable.  You must also maintain acceptable grades and you cannot have any drug offenses on your record.

• Advantages:  Like the subsidized loan you can postpone your payments until after you complete your degree.  If for any reason you do not qualify for the subsidized loan you are still eligible to obtain the same amount with an unsubsidized federal student loan.

• Disadvantages:  An unsubsidized federal student loan is not based on your financial need which means anyone can qualify.  For this reason, it is necessary to apply early to ensure you have the funds in time to enroll in your degree program.  Since the interest is not funded by the government while you are working on your degree it accumulates from the time you obtain the loan to the time when you have completely satisfied the loan in full.  This ends up costing you more money in the long run.  Additionally, the amount you borrow is limited according to your student status and your grade level in school.

You can apply for an unsubsidized federal student loan in the same manner as a subsidized loan by obtaining a FAFSA student aid form online at fafsa.ed.gov or by paying a visit to your guidance office or college financial aid office.  You can track the progress of your application by setting up an account online and obtaining a personal identification number.

Whatever federal student loan you choose or qualify for you will always receive a lower interest rate than if you obtained a student loan elsewhere.  Knowing the difference between a subsidized and unsubsidized loan will help you to decide which option best suits your needs.

If you are thinking about obtaining a private student loan to cover a portion or all of your expenses associated with your education, it is important to do your research to ensure you understand the process as well as the options that are available to you.  The information in this article will provide you with different facts that you should know about private student loans to help you make the best decision regarding your future.

Qualifications for Private Student Loans

In contrast with a government funded loan, private student loans have stringent requirements and in some cases the student may need someone to cosign the note if they have no established credit record or poor credit.  On the other hand, a private student loan does not necessarily require you to be enrolled in an approved program with a certain amount of hours which is unlike the federal student loan requirements.  Additionally, private student loans are generally more flexible in terms of providing funds for different types of expenses outside of tuition.

Private lenders who offer student loans often charge a higher interest rate than a federal student loan.  For this reason, you may want to apply for a government student loan to find out if you are eligible for funding as well as the amount you qualify for.  It makes more sense to take this route and ensures that you only apply for what you need with a higher interest private student loan.
Research Private Student Loans

In the current economy private lenders are more hesitant to lend large amounts of money but there are still sources that offer private student loans.  Make sure you research multiple sources for student loans to compare interest rates, additional fees, terms for repayment, penalty fees, and qualifications for credit.

It is important to be in good standing with your credit and if you have no credit the lender may require a cosigner.  This is because private student loans are typically dispersed directly to the borrower instead of the educational institution to allow you to use the money for different types of school related expenses.

Lending Limits

As a general rule, private lenders typically set both a minimum and maximum amount that you can borrow.  The minimum amount for a private student loan is commonly one thousand dollars so if you need less than that this may not be a viable option.  The annual amount is generally in the range of around $45,000 or the approximate cost of annual college expenses for the institution you are attending.  There is usually a cap on the amount you can borrow over a lifetime which varies according to the private lender you are using.

International Study

If you are going to participate in a study abroad program it will be necessary to work with a private lender that awards this type of loan.  In order to qualify U.S. citizenship is required and you must be attending an approved institution of higher learning that participates in student loan programs designed specifically for studying abroad.

FFEL Private Student Loans

When you are researching private lenders parents may be able to obtain a PLUS or FFEL loan.  PLUS stands for Parent Loan for Undergraduate Students which is typically funded through the Department of Education and the institution you choose must be a participant in this type of loan program.

An FFEL loan can be acquired through a private lending institution despite the fact it is termed a Federal Family Education PLUS Loan.  The loan offers a reduced rate of interest for parents of an undergraduate student who is still claimed as a dependent.  The advantages of this type of private student loan is that it can cover your entire tuition cost and repayment can be delayed until after your degree program has been completed.

Look for Additional Funding

When you obtain a private student loan, check to see if there is an opportunity to withdraw from the loan in the future.  You should be on the lookout for new types of funding throughout the course of your education.  If you become eligible for a new grant or newly established scholarships you can substitute this funding for a private student loan.  This leaves you with less debt when you finally complete your degree because the free money reduces the amount you owe on student loans when you finish your college education.

Private Student Loans for a Professional Degree

Students who want to earn their law degree or become a physician often face excessive expenses due to the number of years that is required to invest in completing the degree.  There are federal lenders that offer private student loans for this purpose to reduce the challenges of covering college expenses for an extended period of time.  The loan is low interest and is offered by federal lenders such as Sallie Mae.

These are a few key essentials you should be aware of before you go comparison shopping for student loans.  Knowing what options are out there will help you to make a better decision and reduce the amount of debt you will incur when you complete your degree.

Without a doubt tuition costs for a college degree are on the rise not to mention the additional college expenses that accompany exorbitant tuition payments.  The current shift in the economy has also required students to borrow more money than they can pay back after graduation.  A lot of students have also been required to borrow money from more than one lender which leaves multiple payments and interest rates to be concerned about when the time comes to repay the loans. 

The good news is that students have more options available than years ago and one of the options is the accessibility of student loan consolidation at low fixed rates.  Instead of accumulating interest from multiple loans you can make one payment at a lower interest rate.  Additionally, many of the loan consolidation sources offer flexibility for repayment and will work with you through your repayment term.

Types of Student Loan Consolidation

You can choose to consolidate your student loans with a government funding source or through a private lender.  As a general rule, if you consolidate through a federal government funding source the interest rates are usually lower than those from a private lender.

Some of the federal loan consolidation sources are the subsidized or unsubsidized Stafford loan, FFELP which is a Federal Family Education Loan, Federal Parent PLUS Loan, Perkins Loan, ACS Loan, SLS (Supplemental Loan for Students), Guaranteed Student Loans, and many other federal student loan sources.

How Interest Rates Work

The interest rates for student loan consolidation are calculated according to the average interest rates on the loans that you want to consolidate.  The interest rate is calculated to the weighted average and then typically rounded up to an eighth of a percent for a federal consolidation loan but not exceeding 8.25 percent.  This calculation does not modify the loan principal and instead conserves the payment structure so that it is applied to the overall loan amount.

Qualifications for Student Loan Consolidation

Students and parents are both eligible for student loan consolidation however if both students are married the loans cannot be consolidated together.  Instead each student would be required to pursue their own separate loan consolidation program.  This is a law that was enacted in 2006 to prevent problems in the event of a divorce.

Student loans cannot be consolidated until the grace period has commenced or after the repayment period has started.  If the student loan is in default and acceptable payment arrangements have been made then the loan is eligible for consolidation.  The student cannot consolidate loans while they are working on their degree however; parents are eligible to consolidate any PLUS loans without waiting for the student to complete their degree program.

Restrictions on Loan Consolidation

You can consolidate any student loan funded by the federal government including a single loan for a specified amount.  There are a variety of ways to consolidate student loans including consolidating a consolidation loan. You can consolidate two loans that are consolidated however; the interest rates may be different for the new loan since it is still calculated on the weighted average of the loans.  You also cannot change lenders during the duration of the consolidation loan that combines two other consolidated loans.

Loan Consolidation Amounts

Depending upon the lender that you choose to work with to consolidate student loans, the minimum loan balance will vary according to the lender.  For example, one lender may set a minimum balance of $8000 where another lender may only require a minimum amount of $5000.  Other lenders such as the FDCL or Federal Direct Consolidation Loan program do not require a set minimum requirement.

Consolidation Loan Repayment

Student loans that are consolidated typically operate on a ten year repayment plan however the lender will also work with you on other options if the standard option is not be feasible.  Some of your options include extended repayment which goes beyond the standard ten year repayment plan; repayment based on your income, and graduated payments which increase over time.

It is not necessary to choose an alternate plan unless you cannot meet the requirements of the ten year plan.  If you do not specify the plan you wish to use then you will be granted the standard ten year plan.  When you consolidate your student loans the first payment is due within 60 days following the loan award.  There is also no penalty for satisfying the entire amount of the consolidation loan before the date the last payment is due.

Consolidated student loans are the way to go if you have multiple loans and you want to save money and pay the debt off early.  It is also easier to manage your payments over the long term with a consolidated student loan.

The skyrocketing costs of tuition have coerced many students into funding their education with student loans.  For the most part, student loans are very helpful with funding the costs of education as long as you go about it the proper way.  Part of going about it the right way is being aware of some of the pitfalls you should avoid that can cost you a lot of money and put you in debt for an entire lifetime.

Using Private Loans

Although sometimes it is necessary to apply for a private loan to fund your education you should use this as the last option.  Many people think that a private loan may be the only option available and so they wrack up huge loan amounts that have high interest rates.  This makes it extremely difficult if not impossible to repay within a reasonable period of time.

Instead, make sure you have researched all possible options with regard to student loans that are funded by the federal government, grants, and any scholarships that you may be entitled to related to your area of study.  Filling out an application for a federally-funded student loan is free and you may find you are eligible for funding that you did not know about before you applied.  You can obtain an application at fafsa.ed.gov.  It requires a time investment to fill out however it is highly probable you will find that it is worth it.

Not Reading the Terms and the Fine Print

With some loan applications the description of the terms and the fine print can be overwhelming to say the least.  Although understanding the terms and fine print can be a hassle many people will sign on the dotted line rather than invest the time to read the terms.  Some loans may have a fixed or variable rate, there may be no grace period after you complete school, the repayment terms may not suit your needs, and much more. 

The biggest mistake you can make when it comes to student loans is signing something that you do not understand.  If necessary take the loan agreement to an attorney who will decipher it for you so you do not agree to requirements you cannot meet.

Paying More Than is Required

It is possible to pay more than you should on a student loan.  If the loan has a variable rate it may look good in the beginning however, the rate will change over time and usually not for the better.  A fixed rate may seem like it is higher at the time however, it is likely it will work out to be the better deal over the long term.

Another way it is possible to pay more than you should is by being subjected to fees and/or hidden fees.  Most lenders opt not to charge a fee where other lenders will charge a fee but attract borrowers with a low interest rate.  The money that is saved in low interest is paid out anyway in fees.

Obtaining a Loan for More Than You Need

When it comes to student loans you may find that there is money available so a lot of people will borrow more money than is necessary.  When their college education is complete the borrower ends up in more debt than they can handle.

Most of the time, obtaining a loan for more than you need happens as a result of failing to explore other options before you opt to take out a student loan.  There are many scholarships, grants, and work study programs available that can help you reduce the amount you owe after your degree is complete.  It is worth your time to investigate.

Failing to Pay on Time

Although most student loans have a grace period of six months after you complete your degree, it is important to remember to make your payments on time after the repayment period commences.  Not paying on time can really add up in late fees and can destroy your credit over a long period of time.  This may cost you more because it will require future credit with high interest rates.  Additionally, if you ever decide to consolidate your student loans you may be ineligible for some of the discounts and incentives that are sometimes offered.  If your consolidation loan is scheduled for an extended period of time this can cost you a lot of money over the long term.

Although you know underneath that you need the money remember to shop around and make sure you understand everything before you make a commitment.  Shopping around for education funding gives you the opportunity to make decisions that are more in your favor and help you to find the best loan options that are available.

When you are first awarded a student loan the rates do not seem nearly as important as when the time comes to start making payments after you complete your college degree.  Once you complete your degree and start a new job the rates will matter more when you have living expenses and other financial obligations as you take your place in the adult world.  Here are a few tips on how to get the best student loan interest rates:

Always Read the Fine Print

Although this appears to be a given many people will skip this part when they see all of the fine print with legal terms.  They get impatient and then simply sign on the dotted line without really understanding what they are getting into.

If you tend to get bogged down with legal terms and fine print ask your attorney to look over the terms of the contract.  If the student loan interest rate appears to be a good deal it may prove to be the opposite if there are hidden fees involved.  The money you save on the interest will only be spent covering the fees that the lender charges to initiate and process the loan not to mention the payments when the time comes.

On the other hand, if the lender does not charge any fees for implementing the loan then they may transfer this cost to the interest rate.  Typically if the fees are anywhere from three to four percent this is approximate to a higher interest rate of one percent.

Consider a Federally-Funded Loan

A federally funded loan such as a Stafford loan or Perkins loan almost always has a much lower rate than a private student loan.  For example, at the time you are awarded a student loan that is backed by the federal government the interest rate may be a fixed 6.25 percent where the average interest rate for a private loan could be as high as 8.50 percent.  Additionally, the repayment terms on a federally-funded student loan tends to have more options than a privately funded student loan.

When you are researching the best student loan rates it is important to take into consideration whether or not it is best to go with a fixed rate or a variable rate.  A fixed rate of interest will remain the same throughout the life of the loan where a variable rate will change according to the market.

Although a fixed rate student loan may appear to cost more money at the time of signing, if the variable interest rates continue to rise in the future then the fixed interest rate on your student loan is your best bet.  This can be a tough call since you are not sure what will happen in terms of interest rates in the future.

Student Loan Rates for Consolidation

If you are shopping around for the best student loan rates for consolidation it pays to spend time looking at various options and finding the best interest rates, especially if you have multiple loans.  When you are consolidating your student loans you are combining them into one loan that includes one payment, and for a specified duration of time.  Depending upon the amount you owe obtaining the best interest rate will save you tons of money over the long term.

Pay on Time and Initiate Automatic Payments

Most lending institutions will award you a lower interest rate for making your payments on time.  You can also initiate automatic withdrawal payments directly from your bank account to qualify for extra discounts and incentives.  Although it may not seem to be a lot, if you have a significant amount of money to pay back the savings can really add up over time.

Invest the Time to Comparison Shop

Many people go comparison shopping because it helps determine the best deal and it often uncovers opportunities you would not otherwise find if you chose the first loan offer that came along.  It is well worth your time to comparison shop for the best student loan rates because you will never know when you come across something that could offer an interest rate that is significantly lower than federally-funded student loans.  

When you comparison shop make sure you record your findings and then organize them into a chart so you can easily find the best deal.  You will find that the time it takes to accomplish this will result in significant savings over the long term.

Alternative student loans are another option for covering the cost of a degree in higher education.  Although an alternative loan can cost more it may be necessary to consider if other financing such as federally-funded student loans, grants, scholarships, and work study programs do not cover the entire cost of tuition and college expenses.

What is an Alternative Student Loan?

An alternative student loan is also commonly referred to as a personal loan or a private student loan which is designed to help students with tuition costs and other expenses related to a college education.  These are loans that are typically offered through financial institutions, credit unions, and private lenders which can mean that the interest rate is higher than a student loan that is backed by the federal government.

Alternative student loans can come with a variable interest rate with can change over time.  Some lenders do not place a cap on the interest rates and instead charge the full market rate.  You are also required to apply for an alternative loan with a designated lender with repayment options that will vary according to the lender.

What Types of Expenses are Covered?

The types of expenses that can be covered by an alternative student loan will vary by lender and according to the student.  For example, if you are an undergraduate student alternative student loans will typically cover a portion of your tuition costs, materials for study, and your room and board if you live on campus.

If you are a graduate student an alternative student loan can cover your costs for tuition, study materials, personal computers, transportation, or room and board on campus.  Alternative student loans for parents which are also known as a PLUS loan will help parents to fund the student’s education and is based on the parent’s credit history instead of the student’s credit rating.

How Alternative Student Loans Work

Since an alternative student loan is typically acquired through a lending institution such as a credit union or bank, the criteria will vary according to the lender.  To provide you with a general idea of how the loans work the interest rate will be spelled out in terms of variable or fixed, the student must be enrolled in an accredited degree program at least part time, a designated minimum and maximum amount will be determined by the lending institution, borrower discounts and incentives are usually offered and will vary, repayment terms are sometimes flexible but will vary according to the lender, and the service provider of the loan will be identified.

Who is Eligible?

The criteria for eligibility are typically more stringent than the criteria for a government backed student loan. The criteria will also vary according to the lender of the alternative student loan but for the most part, the loan is based on financial need, other funding sources you have received, parent income, student or parent credit history, and other specific criteria that will be set forth by the lender you choose.

Benefits of an Alternative Student Loan

Although the interest and other factors may prove to be more costly there are benefits to alternative student loans that exceed those of conventional loans.

First, an alternative student loan will bend with the rising costs of tuition.  As college costs continue to increase other student loans are sometimes unable to keep up with the demands.  Alternative student loans tend to be more flexible and will help the student to deal with the rising costs of tuition and other college expenses.

Second, an alternative student loan can be dispersed within five business days of the application where a federally funded student loan may take significantly longer.  With federal funding the application is more involved and there are numerous hoops you must jump through before the funds are dispersed.

Third, alternative student loans do not require as much paperwork and are more based on the desire to earn a college degree rather than solely on financial need.  Federally-funded student loans have considerably more paperwork and offer fewer options for the expenses that can be covered with the loan.

Before you opt to apply for an alternative student loan make sure you have exhausted other funding options in terms of low interest federal student loans, scholarships, grants, work study programs, and any other funding options that you find which will reduce the amount that you owe once you complete your college degree.  Almost every student is eligible for a subsidized or unsubsidized federal Stafford loan and if you dig deep enough you can find a lot of free money in scholarships and grants as well.

Unlike a government or private student loan, ACS student loans originate from Fortune 500 enterprises that take an interest in financial funding for students.  ACS stands for Affiliated Computer Services and is one of the top Fortune 500 companies that fund lenders who offer funding for higher education.

What is it?

Affiliated Computer Services is not a lending institution however the Fortune 500 company offers BPO support for a wide variety of corporations.  BPO stands for business processing outsourcing and provides IT support for enterprises that are responsible for multifaceted client accounts. 

In terms of student loans, ACS administers exorbitant amounts of money for the purpose of helping students fund their education. Additionally, ACS has the advanced technological data infrastructures to track a large number of student loan accounts. Affiliated Computer Services administrates the loans but the loans carry a guarantee that is backed by the federal government.  For this reason, the funding is commonly referred to as an ACS loan as opposed to a government funded loan.

Qualifications

There are several qualifications to consider that will determine whether or not you are eligible to receive an ACS student loan.  First, it is important to make sure you are eligible for some of the federal student loans that are available such as subsidized and unsubsidized Stafford loans or a Perkins loan.  This will determine if you are qualified to receive an ACS student loan since it is backed by the federal government.

You also must consider the educational institution that you plan to attend to ensure the college accepts this type of financial arrangement.  This way you will not waste your time applying for a student loan that the college does not accept.

Last of all, you should review the borrowing requirements since an ACS student loan is designed for both students and parents with dependents.  The application process is not as involved as a federal student loan and is quite easy however; it helps to have everything you need when you log onto the ACS official site.

Why Choose one

With the many options that are available for federal student loans why should you choose an ACS student loan?  Well for one thing the primary reason for choosing this type of funding is simplification.  All you have to do is log onto the ACS website, set up an account, and then complete the application.  Affiliated Computer Services is the primary outsourcing company for the Department of Education and was awarded this position as a result of the company’s ability to manage and store the many student loan accounts.

An ACS student loan is also designed for the sole purpose of offering financial assistance to students and ensures that they will get the type of funding that is appropriate for their needs.

In addition to being an outsourcing company for the federal government, ACS also serves institutions of higher learning that provide financial assistance to students.  Instead of managing all of the accounts and tracking the finances, ACS takes care of everything plus, they will work with other financial institutions to make sure that the student gets the money they need to cover college expenses.

How to Apply

In order to apply for an ACS student loan you must first make sure that you are eligible for a federal student loan.  This means that you must start by filling out the FAFSA form.  After you complete and submit the application you will receive a notice that indicates whether or not you have been awarded the loan.  At this point you must designate the types of financial aid you are using and then return the letter.

Since you must indicate the institutions of higher learning in which you are interested in attending on the FAFSA form these institutions will be notified of your award.  Once this occurs then you can log onto the Affiliated Computer Services website and proceed to apply for an ACS student loan.

ACS also offers student loan consolidation services which is a real plus if you have multiple student loans from different sources.  Because ACS manages their accounts so efficiently, you are assured of a hassle-free repayment plan on your ACS student loan when you complete your degree.  Additionally, the repayment plans offer flexibility which helps you to pay down your loan without going into debt for many years after you get your first job.  You can find out more about ACS student loans by logging on to www.acs-education.com where ACS will step you through the process and explain how the loans work.