How to Get Student Loans for Community College

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Zina Kumok

By Zina Kumok

March 20, 2020

Community college is often touted as the cost-effective alternative to a traditional four-year university – which it is – but that doesn’t mean it’s cheap. The average yearly tuition for public community college is about $4,816 for in-state students and $8,581 for out-of-state students. Private community college is more than three times that much.

While community college students can expect to cut college costs, they’ll still likely need student loans to fund their education. The question is, how does that process differ from those attending a four-year university?

While there are some important distinctions, securing a loan for community college isn’t any more difficult than taking one out for a traditional college. Here’s what you need to know.

Fill Out the FAFSA

The process of getting federal student loans for community college is the same as getting them for a four-year institution. First, you have to fill out the Free Application for Federal Student Aid (FAFSA).

This form asks for financial information about you and your family in order to determine what student loans and government grants you qualify for. You can’t be eligible for any federal student loans if you don’t fill out the FAFSA. Because financial circumstances may change from year to year, the FAFSA needs to be filled out every academic year. 

Students may qualify for need-based and non-need-based student loans. Parents can also take out parent loans in their own name to help pay for their child’s tuition. 

Not every community college accepts federal student loans as payment, so go here to see if your school accepts federal student loans. If the community college you’re looking at doesn’t accept federal loans, you may have to take out private loans or look for a different school.

It’s always a good idea to use federal student loans before you borrow private student loans. Federal student loans generally have a lower interest rate, options for income-based repayment, more generous deferment options and an option to have student loans forgiven.

Be Aware of Student Loan Limits

For many students, community college is a stepping stone to enrollment in a more traditional university. Anyone who plans to attend community college before transferring to a four-year school should be aware that taking out federal student loans now can impact their borrowing ability later on. 

The total limit for federal student loans is $31,000 for dependent students and $57,000 for independent students. Dependent students are those who live at home or whose parents support them financially. Independent students are those who are married, 26 or older or have served in the military.

If you’re a dependent student who borrowed $5,000 in federal student loans for your community college education, you’ll only have access to $26,000 total in federal loans to pay for the four-year institution. That amount should cover two years of community college and two years at a public, in-state university. It likely won’t be enough for an out-of-state public or private college.

If the federal student loan limit isn’t enough, you’ll have to rely on private student loans or consider other options like outside scholarships or a work-study position. You could also pay down some of the federal student loans in order to borrow more from the federal government, possibly taking a semester off in order to earn enough money.


Apply for Private Loans

It’s always best to exhaust all other options before borrowing private student loans – saving for college, cutting college costs, scholarships and federal student loans.

The first step is to compare private loan lenders to see who is the best for you. Here are some things you want to consider:

  • What does the lender require for approval (i.e. credit score, stable income, etc.)?
  • What is the interest rate?
  • What are the different loan terms? This is how long you get to pay the student loans.
  • Will you need a cosigner? If so, does the lender offer a cosigner release?
  • What are the options for deferments or pausing payments if you end up losing your job or other?
  • What are the reviews and reputation for the lender?

Many private student loan lenders offer different types of perks. Here are some examples:

  • Sallie Mae offers free tutoring services to borrowers, cosigner release if you meet qualifications, flexible repayment terms up to 15 years and options to request to temporarily pause payments in times of financial difficulty.
  • College Ave offers flexible loan terms up to 15 years, possible extensions for grace period or forbearance options, a cosigner release and parent loans get to control spending.
  • LendKey offers a chance to put loans in forbearance during economic hardship, cosigner release, and a 0.25% interest rate reduction if you enroll in automatic payments.
  • Discover doesn’t charge any fees and gives a one-time cash reward for good grades (above a 3.0 grade point average).

Credible is a great tool where you could compare multiple private lenders at once for free.

At, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.


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