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How to Pay for College with Bad Credit - Or No Credit

If you are on the hunt for ways to pay for college, but you’re worried about your credit history, there are options available to you.

Image source: / Photographer: Jacob Lund

Before turning to student loans, we recommend exploring other, lower-cost options first. None of these consider credit history when choosing to award aid!

1. File the FAFSA.

The FAFSA isn’t just an application for Federal student loans – it is also the most-used resource that colleges have in determining financial need.

Filing the FAFSA opens the door to institutional aid, or university-given aid. This can take several forms: grants (like the Pell Grant), scholarships (like GPA-based, minority, disability, and need-based), and even tuition waivers.

It also opens the door to state and federal aid, like the 21st Century Scholars Program and other grants.

Federal student loans are usually the best loan option available – explore these before looking at any private student loans!

2. Apply for as many scholarships as you can find.

Scholarships are free money – there is no repayment required. Here are three in-depth blog posts with scholarship tips:

You can also contact a 3Rivers College Funding Advisor for personalized tips!

3. Work at a company that gives incentives to college students.

Many companies provide incentives for college-bound employees, including extra scholarship opportunities, discounted tuition rates at certain schools, and tuition reimbursement. Each company offering assistance has specific requirements and funding limits, but for high school and college students already looking for work, these businesses provide some great benefits.

Some businesses also provide benefits not just to employees, but also to dependents. Check with parental employers to see if any opportunities exist there, too!

If these options don’t cover the full cost of college, there is an extra Federal loan opportunity for families with troubled credit histories.

4. The Direct PLUS loan.

The Direct PLUS loan (sometimes called the Parent PLUS loan) offers parents a loan for their child’s education. The initial process considers bankruptcies, foreclosures, repossessions, and other delinquencies for the past five years, but not overall credit score.

If the parent is found to have an adverse credit history*, there are three ways the loan can still be approved:

  1. With a creditworthy endorser, or cosigner
  2. With an additional form and letter detailing extenuating circumstances
  3. Directly to the student, pending university approval

(*Check out some additional information on adverse credit histories.)

The Direct PLUS loan is an alternative for families who do not qualify for private student loans due to credit history.  Private loans typically have the same considerations as the Direct PLUS loan, but also look at credit score to determine the offered interest rate. If you are unsure about your eligibility for private loans or for the Direct PLUS loan, contact our College Funding team! We are happy to share other strategies for paying for school and to work through your college payment options with you.

If you're ready to defeat your credit worries, visit your nearest 3Rivers branch! Our team members are equipped to provide the guidance needed to help members improve their money matters (including establishing and improving credit) every day!

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