Many college students worry that a bad credit score or no credit history will disqualify them from obtaining certain financial aid opportunities to help meet the cost of college tuition. Many students are turning to student loans, like federal student loans, in order to meet the rising costs of attending a college or university. Without assistance like Federal student loan aid, many would-be college students might miss out on an opportunity to earn their degree.
However, when it comes to borrowing for school many people start by filling out a FAFSA form, which collects information from students to see if they qualify for certain federal aid. Some students are able to obtain grants, like the federal Pell Grant, and with this aid they can pay for the entirety or majority of their college costs.
Yet, those who do not obtain enough scholarship or grant aid to meet their college tuition costs are able to apply for types of student loans that can be beneficial. When it comes to someone with a bad credit score, usually, a private student loan will require a good credit score or a cosigner, and many people may not qualify for this type of student aid. It’s for this reason that many students seek out federal student loans due to the fact that there are options for various types of loans and they do not disqualify a student due to their credit score.
Student loan laws have changed so that federal student loans are made directly from the government and bypass the middleman, which was typically a lending institution. However, students may be able to obtain subsidized federal loans, unsubsidized federal loans, or a parent of a college student can attain a federal loan if a student is still having trouble meeting college tuition costs.
Direct Loans is a program that directs federal student loan lending and other financial aid that can be given to students from the federal government. Students who have received federal student loan aid can use the Direct Loans program not only for various types of federal college aid, but there are programs that can help manage one’s debt after college. While anyone who has a bad credit score should work to repair their credit history and get their finances back on track, typically, a bad credit score will not disqualify someone from student aid through federal student loans.