Best student loans and not the greatest credit

We had a business that failed, so I don’t have the best credit. I’m returning to school and will need a student loan. Which is the best to apply for?

Terry Says:  You can get FEDERAL student loans, and that must be done by filing the FAFSA form (www.fafsa.ed.gov) which will determine how much student aid you qualify for — regardless of credit.  (That’s part of the problem — why student loans have grown to over $1 Trillion — but that’s another story.)   You’ll hve to fill out a lot of personal financia linformation in the FAFSA — but it is used to determine how much Federal money you qualify for.  Work with the financial aid office of the school at which you are applying.  They may also have scholarships, grants or work/study programs that could lower the cost of your education.

BUT DO NOT APPLY FOR A PRIVATE STUDENT LOAN!  First of all, they are all credit-based, so given your situation you probably won’t qualify.  And if you do qualify, the interest rates on these loans will be expensive, along with the fees.  And you can almost never renegotiate private student loans.  And as with Federal student loans, they arenever discharged in bankruptcy.  Private student loans would certainly be an “out of the frying pan, into the fire” approach to re-starting your life.

Finally, even if they are still around, don’t ask your parents to co-sign a loan.  That’s not fair.  This time it’s up to you. And if you feel an education or a degree is worth the investment, you are better off going part time and paying your way as you go to a less expensive community college or trade school.