Attending community college is a smart way to kickstart your higher education, as it’s likely to cost substantially less than a four-year university. However, the total price tag of a public, two-year school could still be beyond your savings.
In fact, the total cost for one year of a public community college averaged $3,900 and jumped to $18,000 for a private two-year college for the 2020-2021 school year, according to the National Center for Education Statistics.
If you can’t pay for higher education out of pocket, you might be wondering about financing options. Here’s how to find the best student loans for community college.
- Best private student loans
- Federal financial aid options
- Basics of private loans
- Alternatives to private loans
Best private student loans for community college
As we explain below, it’s always best to start with federal financial aid before turning to private student loans. But you may still fall short of your funding needs for community college.
Comparing your private student loan options can help you get the right amount with the lowest interest rate possible. Also, check for eligibility requirements, particularly around credit and income.
Here are the best private student loans for community college:
Ascent: Best for discounts
Ascent offers various loan repayment terms, loans with cosigners, as well as the Ascent Outcomes-Based Loan, which offers flexible eligibility for those who don’t have a cosigner or need to build credit. Ascent also offers a few discounts, such as a rate discount of 0.25 percentage points when you enroll in autopay, and a 1% cash back graduation reward on the non-consigned outcomes-based student loan.
Pros:
- Cosigner release after 12 consecutive on-time payments
- Several repayment options available
Cons:
- Only juniors, seniors, and graduate students qualify for the Ascent Outcomes-Based Loan
- Parent loan options not available
Citizens: Best for high aggregate borrowing limits
Citizens offers a variety of student loan types, including loans for undergraduates, graduate students, and parents. Perhaps the most unique feature of Citizens student loans is the option for multiyear approval. If you qualify, you can apply once and borrow for future years with a more streamlined process that only involves a soft credit inquiry.
Student borrowers can defer payments while in school and for six months after graduating. You can also score a 0.25 percentage point reduction on your interest rate for setting up autopay, as well as an additional 0.25 percentage point loyalty discount if you or your cosigner already have a qualifying account with Citizens.
- Interest rates: Fixed or variable
- Minimum credit score: Not disclosed
- Loan terms: 5, 10, or 15 years for student loans; 5 or 10 years for parent loans
- Repayment options: Immediate, interest-only, or deferred repayment (parent loans only come with immediate or interest-only payment options)
- Loan amounts: $1,000 minimum, up to a maximum of $150,000 for undergraduate and graduate degrees; $250,000 for MBA and law; and $180,000 or $350,000 for health care student loans, depending on the degree type
- Loan types: Undergraduate, graduate, MBA, law school, medical school, dental school, and parent loans
- Eligibility: Must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible institution. International students can apply with a cosigner who’s a U.S. citizen or permanent resident. You or your cosigner must also meet credit requirements and make at least $24,000 per year.
Pros:
- Multiyear approval for qualifying applicants
- Lends to international students with an eligible cosigner
- Customized loans for various programs and parents
- Autopay and loyalty discounts
Cons:
- Parent loans don’t have deferred payment option
- Loan limits may not cover your full cost of attendance
- No option to prequalify
College Ave: Best for multiple repayment options
College Ave offers multiple options to pay down your debt while still in school, including full deferral, fixed repayment, full monthly payment, interest only, and immediate repayment. Deferment and forbearance is also available for those students experiencing economic hardship.
Pros:
- Rate discount of 0.25 percentage points when you enroll in autopay
- No fees for application, origination or disbursement
Cons:
- Half of your repayment term must be completed before cosigner release is available
- Minimum income and credit requirements not disclosed
Custom Choice: Best for returning borrowers
Powered by Cognition Financial, Custom Choice offers student loans for undergraduate and graduate students starting at $1,000. You can borrow up to $99,999 per year with a total aggregate limit of $180,000.
Custom Choice accepts applications from U.S. citizens and permanent residents, as well as Deferred Action for Childhood Arrivals (DACA) program recipients who apply with a cosigner who’s a U.S. citizen or permanent resident. International students, however, are not eligible for a Custom Choice loan.
If you apply with a cosigner, you may be able to release them from your loan after 36 on-time payments. You can also receive a 0.25 percentage point discount on your interest rate by setting up autopay, as well as a 2% reduction of your principal balance after graduating.
Custom Choice doesn’t charge application, origination, prepayment, or late fees. It also lets you pause payments through forbearance if you qualify for its natural disaster or unemployment protection programs.
- Interest rates: Fixed or variable
- Minimum credit score: Not disclosed
- Loan terms: 7, 10, or 15 years
- Repayment options: Immediate payments, interest-only payments, flat payments of $25 per month, or deferred payments until 6 months after graduation
- Loan amounts: $1,000 to $99,999 per year (lifetime limit of $180,000)
- Loan types: Undergraduate and graduate
- Eligibility: Must be a U.S. citizen or permanent resident at an eligible institution. You must also meet Custom Choice’s underwriting criteria for income and credit, or apply with a cosigner who does. Eligible noncitizens (DACA residents) can also qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.
Pros:
- 2% reduction of your principal balance upon graduation
- 0.25 percentage point discount on interest rate for autopay
- No fees — not even late fees
- Available to DACA students with an eligible cosigner
- Option to check your rates through online prequalification
Cons:
- No loan options for parents or international students
- Only three loan term options of 7, 10, or 15 years
- Minimum income and credit score requirements not disclosed
EDvestinU: Best for borrowers with good credit
Private lender EDvestinU, part of the nonprofit New Hampshire Higher Education Assistance Foundation Network, offers special discounts to New Hampshire students as well as affordable loan options for borrowers in about 20 other states and Puerto Rico.
EDvestinU provides undergraduate and graduate student loans with no origination, application fees, disbursement, or early payoff fees. While all applicants may qualify for competitive interest rates, New Hampshire students can receive a rate reduction up to 1.5 percentage points and more relaxed credit standards.
However, one downside is its strict requirements for cosigner release. Cosigners can be removed from a loan after 24 monthly payments if the primary borrower has at least a $30,000 gross income, a minimum credit score of 749, and no major collections activities during the past seven years.
- Interest rates: Fixed or variable
- Minimum credit score: Not disclosed
- Loan terms: 7, 10, or 15 years
- Repayment options: Immediate, interest-only or deferred payments while in school
- Loan amounts: $1,000 per academic year up to the school-certified cost of attendance. Lifetime limit of $200,000.
- Loan types: Undergraduate and graduate student loans
- Eligibility: Residents of Alaska, Arkansas, Colorado, Connecticut, Florida, Maine, Massachusetts, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Puerto Rico, Rhode Island, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin are eligible to apply. Applicants must be U.S. citizens or permanent residents, although international students can apply with a U.S. cosigner. Applicants must be enrolled at least half time at an eligible college or university.
Pros:
- New Hampshire students can access lower interest rates and looser eligibility criteria
- Autopay discount of 0.25 percentage points
- International students can qualify to borrow with an eligible U.S. cosigner
- Prequalification is available
Cons:
- Loans are available in a limited number of states
- Cosigner release requirements are strict
- Fewer choices of repayment terms (three) than some competitors
INvestED: Best for Indiana students
INvested is an Indiana company that offers affordable student loans exclusively to state residents. Loans are available to Indiana students and parents who can meet income and credit requirements, or who have an eligible cosigner. Borrowers can borrow as little as $1,001 or as much as the school-certified cost of attendance minus other aid.
INvested provides detailed information on eligibility so borrowers can quickly determine whether to apply for a loan — however, there’s no option to prequalify with a soft credit check. Cosigner release is also available after just 12 on-time payments, considerably shorter than many other lenders.
- Interest rates: Fixed or variable
- Minimum credit score: 670
- Loan terms: 5, 10, or 15 years
- Repayment options: Immediate, interest only, or deferred repayment
- Loan amounts: $1,001 minimum, up to the school certified cost of attendance
- Loan types: Student and parent loans
- Eligibility: Loans are available to Indiana residents only. Borrowers must have a FICO score of 670 or higher, a 30% maximum debt-to-income ratio or minimum monthly income of $3,333, continuous employment over two years, and no major collections or defaults in recent years. Borrowers who do not meet income or credit requirements can apply with a cosigner.
Pros:
- Low minimum borrowing limits
- Autopay discount of 0.25 percentage points
- Short cosigner release requirements
- Transparent qualification requirements
Cons:
- Loans are available only to Indiana residents
- No prequalification option to view your rates
- No loan options for international students
MEFA: Best for fixed-rate loans
Massachusetts Educational Financing Authority (MEFA) is a not-for-profit lender that offers low-cost undergraduate and graduate school loans to students nationwide. While only fixed-rate loans are available, interest costs may be lower than what you see with other private loans.
Loans start at $1,500 up to your school’s total cost of attendance, and MEFA charges absolutely no fees — something that only a handful of other lenders can match.
While you can apply with a cosigner to lock in the best rate possible, removing that cosigner later may be tough. Only one repayment plan allows cosigner release, and you must make four years of consecutive on-time payments and meet other credit and income requirements to qualify.
- Interest rates: Fixed
- Minimum credit score: Does not disclose
- Loan terms: 10 or 15 years
- Repayment options: Full payments, interest-only payments, deferred payments, deferred payments with cosigner release
- Loan amounts: $1,500 minimum up to school-certified cost of attendance
- Loan types: Undergraduate and graduate loans
- Eligibility: Must be a U.S. citizen or permanent resident, enrolled at least half time at a degree-granting, nonprofit institution, and must maintain satisfactory academic progress. Must have no history of default on an education loan and no history of bankruptcy or foreclosure in the past 60 months. Applicants who can’t meet the minimum credit and income requirements may apply with a cosigner.
Pros:
- No fees whatsoever
- Competitive interest rates
- Can borrow up to the cost of attendance
- Flexible repayment options
Cons:
- No rate discounts available
- No variable interest rates
- Only two repayment terms
- Strict cosigner release requirements
- Can’t prequalify with a soft credit check
Sallie Mae: Best for part-time students
Sallie Mae offers the Smart Option Student Loan to undergraduate and graduate students. You can borrow up to your school-certified cost of attendance and apply just once annually to get the funds you need for the entire academic year. Plus, it may be easy to get reapproved for your future years of study — undergraduates have a 97% approval rate when they return to Sallie Mae with a cosigner.
Sallie Mae doesn’t charge origination or prepayment fees, so you can pay off your loan ahead of schedule without penalty. This lender also offers a 0.25 percentage point interest rate reduction when you set up automatic payments on your student loans.
Through Sallie Mae, you can find a variety of loans designed for specific needs, including loans for Master of Business Administration (MBA) programs, law school, bar study, medical school, medical residency, dental programs, dental residency, and other health profession programs. However, this lender no longer offers a career training loan.
- Interest rates: Fixed or variable
- Minimum credit score: Not disclosed
- Loan terms: 10 to 15 years for Smart Option Student Loan; up to 15 years for law school and bar study loans; up to 20 years for medical school, medical residency, dental school, dental residency, and health professions loans
- Repayment options: Immediate repayment, interest-only payments, flat payments of $25 per month, in-school deferment
- Loan amounts: $1,000 up to school-certified cost of attendance
- Loan types: Undergraduate, graduate, MBA, medical school, medical residency, dental school, dental residency, law school, bar study, health professions
- Eligibility: Must be a U.S. citizen or permanent resident enrolled in an eligible program. Noncitizens may qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.
Pros:
- Can borrow up to school-certified cost of attendance
- No prepayment or origination fees
- Loans available to noncitizens with an eligible cosigner
- Cosigner release after 12 on-time payments
Cons:
- No parent loan options
- No option to check your rates through prequalification
- Loan terms not disclosed until after you apply
- Relatively long loan terms
Discover: Best for rewards
One perk that makes Discover stand apart from other lenders is their one-time cash reward. For each student loan you take out from Discover, you can qualify for a 1% cash reward if you maintain a 3.0 GPA. They also cover up to 100% of the school’s certified cost of attendance.
Pros:
- Rate discount of 0.25 percentage points when you enroll in autopay
- International students can apply
Cons:
- Cosigner release unavailable but you can apply
- Minimum credit score undisclosed
Methodology
Credible evaluated private student loan lenders in 10 different categories to determine the best lenders for community college. This included interest rates, repayment options, terms, fees, discounts, customer service availability, as well as eligibility requirements and cosigner release options.
Federal financial aid for community college students
Before considering private community college student loans, make sure you max out your federal financial aid options. There are multiple types of grants, work-study programs, and student loans that can help you affordably finance your education. Plus, federal financial aid tends to have extra benefits that last after you graduate.
After submitting the Free Application for Federal Student Aid (FAFSA), you may be awarded one or more of the following types of financial aid.
Pell grants
A federal Pell grant is for undergraduate students and, unlike a student loan, doesn’t need to be repaid. The maximum award amount for the 2023-2024 academic year was $7,395.
Eligibility depends on the FAFSA’s calculation of your expected family contribution, the cost of your school, and your attendance details. Because this is a grant, you don’t have to worry about repaying the funds.
Work-study
Another way to finance your community college education is through a work-study program. Eligibility comes as part of your federal student aid package. It helps you get an on-campus part-time job to earn money and cover costs. Oftentimes, work-study jobs involve either community service or work that is relevant to your program.
Eligibility is determined by your financial need, your eligibility for federal student aid, and your enrollment as an undergraduate, graduate, or professional student in a full-time or part-time capacity.
The current federal minimum wage is the least you can earn in a work-study job. However, it’s possible to earn more than that depending on the type of job and your skills. The award depends on a couple of factors:
- Your school’s funding level
- The timing of your application
- Your level of financial need
Additionally, as an undergrad student, you’re typically paid by the hour, but a graduate or professional student can be paid hourly or by salary.
Direct Subsidized loans
You may also qualify for a low-interest Direct Subsidized Loan as part of your federal student aid package. As long as you stay enrolled at least part-time, the federal government subsidizes (in other words, pays for) your interest. You also get a six-month grace period of subsidized interest payments once you leave school, graduate, drop below half-time enrollment.
The amount you can borrow with federal loans depends on whether you’re an independent or a dependent student, as well as the year you’re in school. Interest rates are fixed, which makes it easier to budget once your repayment term starts.
Additionally, direct subsidized (and unsubsidized) loan borrowers are eligible for benefits like income-driven repayment options and Public Service Loan Forgiveness.
Direct Unsubsidized loans
With an unsubsidized loan, you’re responsible for interest payments throughout the loan term, even while enrolled in community college. You can choose not to make payments until you finish your program, but the interest is added to your principal loan balance once you leave school and start making payments.
Unsubsidized loans are eligible for several income-driven repayment plans in case you need to reduce your monthly payment in the future.
Direct PLUS loans
Federal Direct PLUS loans have two types:
- Grad PLUS loan: This loan is available for graduate and professional students to help pay for college or a career school.
- Parent PLUS loan: Your parents can borrow on your behalf for community college costs with a parent PLUS loan.
With both loans, the maximum amount you can borrow is up to the cost of attendance. But these loans differ slightly from other federal loans due to their limited availability to parents or grad students.
A credit check is also typically required, so if you or your parents have an adverse credit history, you should probably add a cosigner to your application. Direct PLUS loans are also unsubsidized, meaning interest accrues on the loan while you’re in school, much like a Direct Unsubsidized loan.
| Tip: Beyond federal financial aid, you can also secure scholarships and grants from your state, school, employer, and other sources. You might also consider taking on a paid internship or part-time job to defray the costs of community college. Leave no stone unturned before borrowing. A federal (or private) student loan, given the toll of interest and overall cost of repayment, should truly be your last resort. |
The basics of using private student loans for community college
Private loans come with either fixed or variable interest rates. You may need to make payments while in school, whether it’s a full payment or interest-only. It’s crucial to understand the details of your loan agreement so you can plan accordingly.
In addition to tuition, there are other costs of community college. You’ll need to pay for books, supplies, fees (such as student activity fees), and parking each semester.
And while community colleges typically don’t offer on-campus housing, you’re still responsible for paying your own living expenses. That level of responsibility varies depending on whether you’re already independent or living with your parents or other relatives.
Private student loans can help cover both tuition and indirect costs of attending community college. However, there are pros and cons to consider.
Pros of private student loans
- Simple application process
- Potentially higher loan amounts compared to federal loans
- Flexible use of loan funds
Cons of private student loans
- Variable interest rates can be unpredictable
- May need a cosigner if you don’t have credit history and/or verifiable income
- No income-driven repayment programs or forgiveness like federal programs
Alternatives to private student loans for community college
In addition to private student loans and federal grants and loans, consider these funding alternatives to help pay for community college.
Scholarships
Unlike student loans, scholarships don’t need to be repaid. And there are a number of resources to find programs that you’re eligible for.
Start by searching online for community college scholarship databases. Also, check with local resources through community organizations, local banks or credit unions, religious organizations, and more. Your school’s financial aid office might also offer institutional scholarships.
| Tip: Start your research the year before you plan to enroll in community college and mark application deadlines so you stay on top of your due dates and don’t miss out. When evaluating scholarship programs, find out how many semesters you’ll receive funding. If it’s just a one-year scholarship, you’ll need to find a way to make up that funding the following year. |
Here are a couple examples of scholarships available:
- Sallie Mae Fund’s Bridging the Dream Scholarship Program: This program is specifically geared toward high school seniors from under-resourced communities planning to attend college or a vocational-technical school. Students can apply to win a $10,000 scholarship.
- Hispanic Scholarship Fund (HSF) Scholar Program: The HSF selects 10,000 students every year from its pool of applicants for this scholarship, awarding amounts in the range of $500 to $5,000, depending upon available funds.
Grants
Not only can you apply for federal Pell grants through the FAFSA, you can also search for state, private, and other grants to help pay for your tuition and other community college-related expenses. The best part is that grants don’t need to be repaid.
Explore different types of grants online. You can find ones that are based on merit as well as financial need. Also, check with your community college, which may also offer its own grant programs.
Here are some examples of grants:
- The Fulbright U.S. Student Program: The Fulbright program gives students the opportunity to conduct research, pursue their graduate studies, or teach English abroad.
- Armed services: You can qualify for tuition assistance if you’re an active duty and reserve member of the Army, Navy, Air Force, Marines, and Coast Guard. If you’re a veteran, GI Bill funding covers college tuition and living expenses.