Bad credit should not prevent students from going to college. There are several types of education loans available for students with bad credit from the federal government and private lenders so that almost anyone can get access to fund to get the best possible education.
Most of the times, the federal government provides financial assistance in the form of grants and scholarships and does not look for any credit history of the student. However, there are other loan options that are also available.
Most significant of these are the Stafford Loans that are offered by the Department of Education. These loans are disbursed through private money lenders and are available as subsidized or unsubsidized loans. Another type of loan is the Perkins Loan that is available for both graduate and undergraduate students. These loans are disbursed through the college financial-aid office. Each student can borrow an amount ranging from $1,000-$4,000 every academic year. However, the total loan amount on Perkins Loans for each student should not be more than $20,000. Other popular loan programs that do not consider the credit score of the student include Nursing Student Loan Program, Loans for Disadvantaged Students and Primary Care Loan Program. All these loans are given out at low interest rates that are usually in the range of 3-5 percent.
Apart from government agencies, there are also several private lending firms extending student loans with a bad credit score. However, one has to pay a higher interest rate so as to avail these loans.
Government student loans like Stafford and Perkins loans assume that the parents would be contributing a part of their child’s education expenses. PLUS loans have been designed to help parents with better credit record cover the amount that they are obligated to contribute.