How to Get Student Loans for Community College

Over 4.8 million students enrolled in community colleges in the U.S. in the fall of 2020, according to the National Student Clearinghouse Research Center. Community college isn’t only an inexpensive alternative to traditional four-year universities, but it also provides flexibility for working students and adult students.

A recent report by The College Board reveals that the average total cost to attend community college during the 2020-2021 academic year is $12,850. The average cost of college at a public four-year school for in-state students annually is $22,180 and $38,640 for out-of-state students. A private four-year school is even higher at $50,770 per year.

Although community college represents a less expensive option for students, there’s still a cost to consider. There are several student loan options available to help cover community college costs, including federal and private student loans. Keep reading to learn how to get student loans for community college, what options are available.

How to apply for student loans for community college

Applying for federal aid is the same process for community colleges as it is for four-year colleges. It all starts with filling out the Free Application for Federal Student Aid (FAFSA). The FAFSA is a free form used by the government and schools to determine if you qualify for aid, including:

• Federal student loans
• Grants
• Work-study programs
• Select scholarships

The type of aid and amount you qualify for depends on the personal information you include on the FAFSA form. The FAFSA must be completed and submitted by the deadline the year before you plan to attend school.

Filling out the FAFSA

1. Set up a Federal Student Aid (FSA) ID. Everyone who plans to receive federal student aid must create an FSA ID. Your FSA ID is used to log into the FAFSA site and to sign your documents.

2. Gather necessary information. To complete the FAFSA, you’ll need your:

• Drivers license number (if applicable)
• Social Security number
• Federal income tax information
• Bank and investment account information

You’ll also need your parents’ personal and financial information if you’re a dependent student.

3. Fill out the application. Log in to the FAFSA website and complete the online application. You can also fill out the form through the myStudentAid mobile app. There’s an option to save your progress if you want to finish it in more than one sitting.

4. Submit your application. When you’ve completed the form, sign it using your FSA ID, and submit your application.

When completing the FAFSA, you’ll list any schools you want to receive your information, including community colleges.

Federal student loans for community college students

There are three main federal student loan options you can receive to pay for community college expenses. Here’s an overview of each type:

• Direct Subsidized Loans. Undergraduate students showing a financial need are eligible for Direct Subsidized Loans. The government covers accrued interest on these loans while students are in school and during the loan’s grace period. The government also pays the interest during periods of deferment.
• Direct Unsubsidized Loans. These loans are open to both undergraduate and graduate students. Financial need isn’t a requirement to receive a Direct Unsubsidized Loan. Unlike Subsidized Loans, though, students are responsible for all of the accrued interest.
• Parent PLUS Loans. Parents can also help pay for their undergraduate child’s college education through Parent PLUS Loans. Parent borrowers can borrow up to the total cost of attendance, minus any aid that’s already been awarded. A credit check is performed during the approval process for Parent PLUS Loans.

How much can you borrow from the federal government to pay for community college? The limits are the same as they are for other four-year undergraduate programs.

Maximum federal loans for community college for 2021

Independent students and students whose parents don’t qualify for Parent PLUS Loans can receive up to $6,000 in Unsubsidized Loans in both the first and second year.

The maximum Parent PLUS Loan amount is the total cost of attendance minus any other financial aid the student received.

Private student loans for community college students

Private student loans are another option if federal funding doesn’t cover the entire cost of community college expenses.

Typically, most undergraduate students wouldn’t qualify for private student loans without a consigner’s help. That’s because approval for private loans is based on your creditworthiness and other financial factors. Most undergraduate students haven’t had enough time to build up their credit history or meet income requirements.

Community college students who work full-time, though, might have a better chance of being approved. If you meet credit requirements, you might even qualify for lower interest rates than those offered on federal student loans.

The best student loans for community college students

The good news for community college students is that you aren't left out when it comes to receiving help to pay for your education. With lower tuition costs than four-year schools, you likely won’t end up burdened with as big of a total debt bill either.

Your first and best option is to take advantage of any federal funding available. Federal student loans come with extra benefits like access to loan forgiveness, income-driven repayment plans, and extended deferment and forbearance. Private student loans generally don’t offer this type of additional support.

If you need assistance determining the best course of action for community college funds, you can book a pre-debt consult with one of our team members today.