With obligations like taking care of one’s family, providing financial support and much more, most students don’t have the luxury of being able to attend college full time. Instead of displacing oneself of an education they enroll as a part-time student. Getting an education is still expensive and being a part-time student makes it difficult to qualify for student loans. Even those borrowers looking for federal direct loans have to be enrolled at least half time.
The part-time and full-time status is not the same for all the schools, each school has its own way of deciding who is a full-time or a part-time student. Generally, full-time status is for those enrolled for at least 12 credit hours per semester and a half-time status is for those students who have enrolled for 6 credit hours per semester. Taking up less than 6 credit hours is considered less than half time.
Before jumping into the private student loan options it is advised to exhaust yourself with the federal options available to you. Let’s find out what a part-time student needs to know and consider while deciding on a student loan. There are also a number of last minute student loans that you could look into if you are working part-time and are still unable to cover all your educational expenses and are looking for ways to make more money.
Table of Contents
- Options for part-time students
- Private student loan minimums
- Steps on how to get the right student loan
- Repayment for part-time students
Student loan options for part-time students
Full-time students are those who have taken 9 to 12 credits they have access to a number of loan options both from private institutions and from the federal government as well. Part-time students have loan options as well, if you have taken at least 6 credits then you are eligible for federal student loans through the William D Ford Direct Loan Program.
The federal loans distributed are based on financial need, eligibility for the loan amount is done through the FAFSA form. The Expected Family Contribution (EFC) is a determining factor for the amount of aid the part-time borrower is eligible for. The Cost of Attendance (COA) for a part-time student is lower than that of a full-time student so the amount of funding required will be lower.
If you can land a direct subsidized student loan then you get you won’t have to pay any interest on the loans. As long as you maintain the half-time status. Given the situation that you drop below the half time status then you will automatically enter the grace period. Once the grace period is done, you will start the repayment period.
Private student loan minimums
Along with loan maximums, loan minimums also play a huge role during the lending. For those borrowers who have enrolled as less than half time students, they may not qualify for a loan minimum. The minimum amounts range from $1,000 to $2,000 or sometimes even higher depending on the lender you decide on.
Certain private lenders allow their borrowers to take out a student loan as a line of credit (or LOC) for the entire duration of your academic career. It should be noted that the borrower will still have to maintain annual minimum amounts. There will be a good amount of flexibility provided to the borrower as they are allowed to specify how much money you will need to borrow against the total LOC each year.
The cost of attendance for the program of study is to certified by the school in order to determine how much funding the borrower is eligible for. If the borrower is eligible for any other financial aid then that amount is subtracted from total funding needed. The funding received is disbursed directly to the school on behalf of the borrower which is used to meet all the education-related expenses.
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Steps on how to get the right part-time student loans for you
Although there aren’t a lot of options out there for part-time students it is still crucial to check if that particular student loan is right for you, here are a set of steps a part-time student can follow to try and get the right student loan -
Step 1. Submit FAFSA - On filling FAFSA you get access to grants, scholarships, work-study, and federal student loans. As a part-time student, your cost of attendance is lower as you attend only one or two classes per semester. The federal student loans are still available to you even if you do not qualify for need-based aid. The part-time student can borrow an amount up to your total cost of attendance.
Step 2. Improve your credit score or get a co-signer on board while applying for private student loans - An undergraduate student will not have a high credit score or favorable credit history to get a loan right out of college, so the best chance to land a loan will be to get a cosigner with a good credit history onboard. On getting a private student loan with competitive interest rates you will need a credit score of 690 or higher.
Step 3. Compare the private lending options available to you - The private student loan options for half time students is limited. Upon comparing the options it is important to check for the lowest interest rate you can qualify for. Check if the lender can allow postponing payments in case you have difficulty in making the payments. Another important factor is the fees associated with the private lender like the origination, prepayment, and late fees. It is important to evaluate how easily you can reach the lender by phone, email or live chat if you come across any issues during the billing process.
Step 4. Opt for a fixed interest rate - It is always advised to opt for a fixed interest rate as it is not subjected to fluctuate like a variable interest rate.
Repayment of student loans for part-time students
As a part-time student, you will have to make payments while still in school. The payments will depend on the status and the lender.
Private student loans - It is important to check with your lender as most lenders will require the borrower to start making payments as soon as he/she falls below the half time status. Some lenders will allow the borrower to defer making payments even if he/she takes just one class per semester.
Federal student loans - For these loans, the repayment will begin as soon as you fall behind the half time status.
Given the situation that you have existing student loans that were taken as a full-time or part-time student and then you moved into a less than half time enrollment, you will be required to make payments towards your student loans while you are still in school. Be well aware of all the options available to you and go ahead with the one best suited for your financial condition.