Given that the costs of college education are on the rise, students turn to loans to help finance their necessities. Among the most reliable of these are federal loans because of the low interest rates and light payment options.

However, federal loans are becoming less available particularly in community colleges. The reason for this is that most students who apply for these loans are those who are taking up 2-year degrees. Unlike students pursuing 4-year degree programs, students under 2-year degree courses pay less school-related expenses. It only takes them a couple of years to graduate, after which they can immediately seek full-time work.

This situation may favor loan boards and appear to address increasing student debt. However, scrapping federal loans in community colleges seem to miss the point.

What college administrators do not realize is that federal loans do not only help students finance their college needs but also tide them through when they have little money for everyday expenses. These loans also act as their operational capital while investing time and effort to land jobs after the semester ends.

While it’s true that aside from federal loans, community colleges also offer private loans and credit card loans, these loans are much more expensive and have higher borrowing standards that most low-income students cannot afford.

Other government and private scholarships as well as other forms of financial aid, are also available for these students to apply for. But federal loans make up an important percentage of student aid, so these should be made more accessible, not less.

By: Fae Cheska Esperas

Private student loans are the loans that are given by the banks over and above the student aid that is given to the students. These loans are also called as the alternative student loans.

These loans are paid generally to the school in which you are enrolling. In general the banks prefer it to be directly given to then school. However since these are private student loans there are banks and credit unions which give these loans directly to the students.

The reason for this is simple as that will mean that the students can use these loans to buy books or a computer or even to pay their living expenses. This cannot happen if the loans are given directly to the school. That said before applying for the private student loans make sure that you check as to how the proceeds be given.

If in case the proceeds are not given to you directly then you can try another lender. Please make sure that when you apply for the loan that you specify the exact purpose for which you need the loan. This helps in getting the loan application approved. Once approved tell the approving bank for the person in whose name the check should be written by the bank. The side benefits of receiving the funds directly are that your school loan limits are not exhausted and it is as good as your personal loan.

Make good use of the loan and repay it back faster as these private student loans are very expensive.

By: Bruce Victor