Student Loans for Part-Time Students
Many students do not have the luxury to attend college full-time for a number of reasons; they may need to work or take care of a family, for example. When determining financial aid eligibility, part-time status – sometimes called half-time – is generally considered six credits at a time. While there may be more options for full-time students taking between nine and 12 credits, part-time students have options as well. If you take at least six credits, for example, you are eligible for federal student loans through the William D. Ford Direct Loan Program.
These loans are mostly based on financial need, and the FAFSA is used to determine your Expected Family Contribution, or EFC, to decide how much aid you are eligible for. Your cost of attendance (COA) at your potential school will be lower than that of a full-time student; therefore, your funding will also be lower. Loan amounts are also based on your academic year in school.
The U.S. Department of Education is the lender for federal loans, and with Direct Subsidized Loans, they pay your interest as long as you maintain your half-time status. Direct Unsubsidized Loans require you to pay interest for all periods of your loan. If at any point you drop below half-time status, you will enter into your grace period after which your repayment period will begin.
Private Loans for Part-Time Students
After exhausting all forms of federal financial aid, and if you are not participating in the Federal Work-Study Program, you may seek out private student loans to cover the cost of attendance. Private lenders may be banks, credit unions, private organizations or foundations, state organizations, or even your potential school. Each of these institutions will have their own rules, eligibility requirements, and loan rates and terms. Some schools require that you maintain a certain level of academic progress to be eligible, while others may offer aid to students entering particular fields of study.
Private student loans are based on credit, and in order to qualify for the most favorable rates, you will need a good credit rating. That being said, you can always apply with a creditworthy cosigner to help get better rates or to qualify. Be sure to check with your state as well as your school’s financial aid office to determine what, if any, resources they may have for part-time students seeking financial aid.
Many private student loans have loan minimums as well as loan maximums, and if you are considered less than a half-time student, you may not qualify for the loan minimums. These minimum amounts can range from $1,000 to $2,000 or even higher, depending on the lender. Some private lenders will let you take out a student loan as a line-of-credit, or LOC, for your entire academic career. You may still have to meet annual minimum amounts, but this allows for slightly more flexibility as you are able to specify exactly how much money you will need to borrow against your total LOC each year. Schools are usually asked to certify the cost of attendance for their program in order to determine how much funding you are eligible for. Any other financial aid you are receiving is then subtracted from this amount to determine the total funding you may need. Funding is then disbursed directly to your school on your behalf to pay for your education-related expenses.