Student Loans with Bad Credit: A Review of the Facts

The economy and the worldwide job market have taken a serious hit lately. There are many people out of work or working for much less than they need to sustain a middle class quality of life. For most of the unemployed or underemployed, the only ticket out of their current state is through further training and education. With the right degree, even a down job market can be navigated through with ease. The problem with this scenario for many adults, however, is that their bad credit scores make the acquisition of student loans seem nearly impossible.Getting Funding for SchoolThe truth of the matter is that bad credit is always a barrier when looking for personal loans, but student loans are a different type of financial package. Instead of requiring a credit check, student loans are given based upon need and often do not take credit into account whatsoever. The reason that this can happen is simple: since the loans are only meant to finance school expenses, such as tuition and books, lenders feel that the investment is worthwhile. Once you finish school, the new job you get will more than help you pay back the money that you owe.Another reason that student loans are given to those with bad credit stems from the special circumstances surrounding their repayment. Many loans are not repaid until after you are no longer enrolled in school, meaning that you are not required to maintain a job to repay your loans as long as you engage in full-time study. Also, student loans are the only loans that cannot be discharged in bankruptcy. This means that no matter what, you will need to pay this money back.Finding a Source for Student LoansThere are several institutions and entities that offer educational funding and who are willing to work with those who have bad credit or no credit history (such as students just out of high school). The federal government is the most popular place to start. By filling out the Free Application for Federal Student Aid (aka FAFSA) at the same time that you apply to schools, you will automatically be told how much money you are qualified to borrow each year. This amount will vary depending on your financial need, level of education (graduate students are offered more money than undergraduates) and the credit load that you carry each semester. You can fill out the FAFSA online through the U.S. Department of Education website.Once you have determined how much money is offered by the federal government, your next stop is to talk to the Financial Aid department at your particular institution. The people there can inform you of any college-specific loans and scholarships that may be available to you. Sometimes, depending on your major, individual departments can offer grant and work-study money as well. You can find out about these opportunities through your Financial Aid office or from the department secretary at your school.There Is Private Help Available, TooThe final option for those needing extra money for school – perhaps to fund living expenses, for example – is to look into private lenders. Even with bad credit, student loan packages can be arranged through private lenders that will take your status as a student into account and help you to fund your education. Since you have bad credit, there may be a higher interest rate than those offered by federal loans, however.Finding the money that you need to fund your college education is easier than you thought. Even with bad credit, student loans can be found with ease. With a few simple steps, you can be on your way to getting the degree and job you have always wanted.