Student Loans That Do Not Need A Cosigner

Federal Direct Student Loan (Subsidized)

The federal government offers loans to students who attend school full time. These loans are called Subsidized student loans because the government pays interest while a person is enrolled at least half-time. After attending school for three years, borrowers have their loan payments deferred until they graduate from college and enter repayment phase. Borrowers may continue making monthly payments after graduation while they pursue gainful employment and receive their first paycheck. Most lenders allow borrowers to change repayment terms without having to pay additional fees. However, some private lenders charge higher rates for early payment termination.

Federal Pell Grant

This program provides grants to low-income undergraduate students who demonstrate financial need. Students must maintain satisfactory academic progress to remain eligible. There are two types of Pell Grants: subsidized and unsubsidized. All recipients of the Pell grant must complete the Free Application for Federal Student Aid (FAFSA). Recipients qualify for both Pell Grant and Stafford loan funds based on income and family size.

Federal Perkins Loan

This type of loan is available to eligible students majoring in fields that do not require previous work experience. To be eligible, applicants must earn less than $50,000 annually in adjusted gross income and have demonstrated financial need. Borrowers can choose between fixed or variable rate options. While the fixed rate option lowers monthly costs, it increases the total amount owed over the course of the loan term. On the other hand, variable rate loans lower initial payments at the expense of increased loan balances.

State and Private Scholarships

Most states offer scholarships designed specifically for high school graduates interested in studying science, technology, engineering, art, math, or architecture. In addition to state awards, many colleges and universities offer merit-based scholarships. To apply, individuals should contact the school directly. Many scholarships require applicants to submit SAT scores along with application materials.

Work Study Program

Work study programs are funded through organizations like the Department of Education. Organizations participating in this program usually provide free training and certifications. Students enroll in classes to obtain skills needed to prepare for career opportunities upon graduation. Programs vary according to employer requirements and job type. Students must pass a criminal background check before applying.

Military Service Benefits

Students who joined the military and completed active duty service are end to several educational benefits. Veterans and active duty members are eligible for GI Bill benefits, which cover tuition, room and board, books, computers, and equipment. Eligibility varies depending on length of service and whether the individual was previously employed in a field requiring specialized education. Active duty personnel are also eligible for Vocational Rehabilitation Services if they were injured on the job.

National Guard/Reserves

Individuals who join the military to serve their country are automatically enrolled in the National Guard or Reserves. If you decide to leave active duty, you can transfer your benefits to the reserve component under certain circumstances.

Student Loans That Do Not Need A Cosigner

Federal Direct Student Loan

The federal direct student loan program was created under  IV of the Higher Education Act of 1965. The goal of the program was to provide low-interest loans directly to students who were attending college. The interest rate for this type of loan was set below market rates, and the government assumed the risk of default.

Federal Perkins Loan

Perkins loans are federally funded loans to help cover tuition costs at schools that do not have adequate financial aid packages. This loan program is designed specifically for students attending community colleges, vocational schools, technical schools, junior colleges, and tribal colleges. These loans are based on need and generally have lower interest rates than federal direct loans. However, they carry greater risks than direct loans because the money comes directly out of the US Department of Education account rather than an insurance policy.

Stafford Loan

Stafford loans are funded by the U.S. Treasury Department and administered by the U.S department of education. To be eligible for this loan, undergraduate students must be enrolled half time (or less) and graduate before the completion of their bachelor’s degree. Students may borrow money to pay for any school related expenses including tuition, room and board, books, supplies, equipment, technology fees, computers, software, Internet access, transportation, childcare, and other reasonable and necessary expenses associated with their education. The maximum amount of debt forgiven for each borrower is $23,000.

PLUS Loan

PLUS loans are federally subsidized private loans that enable parents to borrow funds to help repay educational debts for their children. Students who qualify for the loan may receive up to $31,250 per year towards postsecondary education. Parents must sign a promissory note agreeing to repay the loan plus 8% interest if the original loan becomes delinquent. The current annual interest rate for PLUS loans is 5.21%.

Parental Cancellation of Debt

If you are having trouble paying off student loans or if you want to consolidate your loans but don’t have enough assets, then parental forgiveness could be a good option. In fact, some states offer exemptions from taxes that can be used to help pay back student loans. Find out what these options are and how to claim them when filing your tax returns.

Income Based Repayment Plan

This plan offers graduates between six months and 15 years after graduation from public or private colleges and universities the opportunity to make payments according to their income. However, repayment begins only once borrowers reach 18 years old and completes 20 years from the start of repayment. Borrowers must prove that they meet certain criteria to be considered for this alternative payment plan.

Public Service Loan Forgiveness Program

Students who work for 10 years in public service jobs and complete 120 qualifying monthly payments without defaulting on their loans might be able to have their outstanding balance forgiven. The length of time that it takes for the loan to be completely forgiven varies depending on whether the borrower works for the federal government, state government, local government, nonprofit organizations, non-governmental entities, or faith-based institutions.

Student Loans That Do Not Need A Cosigner

Income Based Repayment (IBR)

Income Based Repayment is a type of repayment plan offered by the federal government. There are some conditions that apply to this plan, including qualifying based on income and having no other student loans. By making payments each month, this plan helps to pay off your loan faster than standard plans. However, depending on how much money you make, you may not qualify for IBR. If approved, payments will be lower while still paying down your debt.

Pay As You Earn (PAYE)

Pay As You Earn is a type of repayment program offered by the federal government that requires 20% payment towards your monthly bill. In order to receive this repayment option you need to have at least half time employment, and only eligible public servants are allowed. Payments are higher than income-based programs, but if you are working full time, you should still be able to meet these obligations.

Graduated Payment Plan (GPP)

Graduated Payment Plans allow you to set varying amounts of repayment based on how long you take to repay your loan. Therefore, the longer you take to make payments, the lower your minimum payment amount will be. At the beginning of your repayment period, you will make a larger payment than usual. After about 10 years, payments become smaller again until after 15 years, where they end completely.

Income Contingent Repayment (ICR)

With Income Contingent Repaidments, you make a fixed payment throughout your entire lifetime. Unlike the other plans, you do not have any credit limit or maximum payment; however, if your income increases, your payments increase accordingly. When you finish repaying your loan, you will automatically enter a grace period. When you start taking out a new loan, the existing balance will be added onto your new loan.

Public Service Loan Forgiveness (PSLF)

If you work for certain non-profit organizations, then you will have a chance to gain access to PSLF. Under this program, if you work for the US Government or a recognized 501(c)(3), you will be protected under this program. Once you have worked for a qualifying organization for five years, you will be able to request forgiveness of the remaining principal and interest.

Federal Perkins Loans

The federal government offers a lending program for students who attend schools that are either low income or do not offer enough funding. These loans help borrowers cover tuition costs, books, and fees. Borrowers have to have an annual earnings of $50,000 or less to qualify for these federal loans.

National Direct Student Loans (NDSL)

National Direct Student Loans are provided by private lenders instead of the federal government. NDSLs do not require cosigners, and will not be discharged through bankruptcy. You can use them to fully fund your education without worrying about defaulting on your loan.

Student Loans That Do Not Need A Cosigner

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Disclaimer:

I don’t have any financial background / expertise off the top of my head. I’ve done enough research around this though to make sure they were legitimate opportunities and legit companies. As always, please use your own discretion and do your own due diligence before making any decisions. 🙂

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Student Loans That Do Not Need A Cosigner

Federal Direct Loan Program (Direct Subsidized)

The federal loan program offers loans directly from the government to students and their parents. The student borrows money from a bank at low interest rates and repays back the loan over time while paying only a small percentage of the total amount borrowed each month. A cosigner may be needed if the student’s family income is not high enough to qualify for financial aid. However, some people who are willing to help pay off their student loans should not feel pressured to do so. Students should always have complete privacy regarding their finances because they are borrowing money from the U.S. Government. If they ask someone else to cosign with them, it could jeopardize their chances of receiving financial aid. The government does not collect any information about the borrower’s identity unless they default on their student loans.

Parent Plus Student Loan Program (Parent PLUS)

This type of loan is taken out by the parent to cover the total cost of tuition, room, board, books, fees, transportation, and other costs associated with school. In return, the student makes payments based on his/her monthly salary. If the student defaults on these loans, the parent is charged interest on top of what was already paid. There are some limitations to this type of loan, including having to repay the original loan plus a penalty fee that ranges from 10 percent to 20 percent of the outstanding balance. Parents who wish to get a private loan to cover the educational expenses of their child should talk to a trusted lender. The lenders have access to a wide range of credit scores and qualifications, making it possible to find a suitable loan for almost anyone.

Stafford Loan Program (Subsidized)

The subsidized part of the loan covers 75% of the total cost of tuition and provides a fixed interest rate of 4.31%. The remaining 25% comes from the student’s personal funds, and the student pays the whole amount back within ten years. This type of loan is available to undergraduate students whose families earn less than $65,000 per year. The difference between a subsidized and unsubsidized loan is that a subsidized loan includes lower interest rates, but requires the student to make larger monthly payments.

Perkins Loan Program (Subsidised)

This type of education loan is specifically designed for students pursuing post-secondary education beyond college. Perkins loans are funded by the federal government and state governments, and are guaranteed by the U.S. Department of Education. Unlike the other types of student loans mentioned above, there are no restrictions placed on Perkins borrowers. This means that a student can take out a Perkins loan without worrying about how much debt he/she may accrue in the future. Another perk is that Perkins loans are considered to be the best option for parents who want to cover their children’s post-graduate education, since most of the loans offered by banks and other institutions are set to expire after five years.

FFELP (Federal Family Educational Loan Program) (Unsubsidised)

These types of loans are issued by private lenders and are repaid entirely from the borrower’s earnings. The interest rate varies from 6.8% to 8%, depending upon several factors. One downside of this loan is that repayment begins once the student starts working full-time. This can pose a problem if the student wants to continue schooling later on in life. Therefore, this type of loan is not recommended for those who plan to pursue advanced degrees after graduation.

Unsubsidized GradPLUS Plan

GradPLUS is a program created by the College Cost Reduction and Access Act of 2007 to provide higher education loans to undergraduates. These loans were originally established to replace the former Guaranteed Student Loan Program. Undergraduates may qualify for this type of loan provided they meet certain criteria, including being enrolled in a degree program, graduating with a minimum GPA of 2.50, and maintaining satisfactory academic progress. In order to receive loans under this program, however, the student must first apply to the regular federal student loan programs. Eligibility guidelines change yearly, so freshmen applying for GradPlus loans should check on the official website before filling out forms or submitting applications.

Private Student Loan Programs

Private student loans are also available, but the process of obtaining a loan can be complicated. Many private schools will require a student to submit a copy of the accepted offer letter along with transcripts and recommendations. Private lenders also charge more than federally backed loans and typically require cosigners.

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