Help! I can’t get Private Student Loans

Michael Lux Blog, Student Loans 2 Comments

These days most students realize that the best way to pay for college is grants and scholarships.  Most people also know that Federal student loans are the best way to cover the gap; but if you are really desperate, a private loan can cover you in a pinch.  Things start to get stressful if you can’t qualify for a private loan.  Whether it is your negative credit history or parents who are unwilling or unable to qualify, not knowing how to pay for college can be a scary thought.

Step #1: Don’t panic

Being denied the private loan you think you desperately need is not the end of the world.  In fact, there are many grads and former students who can only wish that their application for a private loan was denied.

Rather than panicking, now is the time to get creative and find other ways to fund your college education.  You may end up finding a source that works out far better than a high interest private loan.

Step #2: Pester your financial aid office

This approach is far more effective at some schools than others, but regardless of where you go, it is worth a try.  Most schools would rather give you some extra scholarship money instead of having you drop out.  If you explain your full situation and the steps you have taken to your financial aid off, they may be able to help you cover the gap in cost.  The sooner that you get to your financial aid off, the better off you will be.

Your financial aid office may also be able to help you…

Step #3: Find a job

Too many students are dismissive of working during school because it might “interfere with their studies”.  If you are having trouble covering the cost of your education, finding a job could be the thing that keeps you in school.  Many college towns have a number of jobs targeted at students, and some pay pretty well.

If you can find a job in your desired field, you can get a paycheck and get experience that will give you an edge over your classmates in the job market.

Step #4: Be willing to adjust your plans

Attending to college according to the schedule you made at 18 is nice, but it is hardly a necessity.  If you can only afford a part-time schedule, consider going part-time before you sign up for a high interest loan.  It may result in college taking a little longer, but nobody looks back on their college days and wishes that period of their life was shorter.

Taking a semester off to get your funds in order should also be considered.  It is an option that is hardly ideal, but it could be the time you need to get the necessary funds or to improve your credit so that you can qualify for the loans you need.

Step #5: Get Creative

Getting a traditional job is hardly the only way to make money.  One guy started a kickstarter campaign to raise money to buy the ingredients for a potato salad… he made 55k.  If you do something new or interesting, people will jump on board, especially if they know your good cause.

The bottom line

Not qualifying for the student loan you need can be a setback, but there are many ways to make sure that you can still afford school.