How to Get Student Loans for Community College

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Zina Kumok

By Zina Kumok

January 27, 2022

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. So the question is, how does that process differ from those attending a four-year university?

While there are some critical 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. But, first, you have to fill out the Free Application for Federal Student Aid (FAFSA).

This U.S. Department of Education form asks for financial information about you and your family to determine financial need and what student loans and government grants you qualify for. If you don’t fill out the FAFSA, you aren’t eligible for financial aid, including federal student loans from the Direct Loan program. In addition, because financial circumstances and eligibility 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. Students need to demonstrate financial need to be eligible for Direct Subsidized Loans. Borrowers don’t need to demonstrate financial need for Direct Unsubsidized Loans. However, you must meet other eligibility requirements, such as being enrolled at least half-time. 

Parents can also take out parent loans in their name to help pay for their child’s tuition. The most common of these loans are Parent PLUS loans through the Direct Loan program. While these loans can offer additional aid to students, Direct PLUS loans generally have higher interest rates than other federal loans.

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

Community college is a stepping stone to enrollment in a more traditional university for many students. 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. 

The total limit for federal student loans is $31,000 for dependent undergraduate 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.

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

Keep in mind that some maximum loan amounts are based on the cost of attendance. For Direct Subsidized Loans, each school determines the amount you can borrow based on the cost of attendance and other financial aid you receive.

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 federal student loans to borrow more from the federal government, possibly taking a semester off 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. In addition, federal student loans have many features that private student loans generally do not, including access to income-driven repayment plans, loan forgiveness options, and forbearance.

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? Is it a fixed interest rate or a variable rate?
  • How much are the monthly payments, and what are the repayment options?
  • 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?
  • Are there any fees, such as disbursement or origination fees?
  • What are the reviews and reputation of 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.

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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