School loans have been an item of concern lately, not only due to the extraordinary pace of increase in debt amounts but also in interest rates assessed on them. There are some options beyond private loans or subsidized loans, such as community-based school loans, which are gaining traction.
Organizations all over
Students who are likely to university and need some cash to do it might be able to get a community-based student loan depending on the area they go, according to a Daily Finance article. These community organizations are showing up all over the country, and MarketWatch has the majority of the details.
It's not dissimilar to the more recent phenomenon of "crowd funding" or "crowd sourcing," in that donors are solicited for funds. They throw a certain amount into a communal pot, from which loans are made.
The Canton Student Loan Organization of Canton, Ohio has lent $27 million to over 5,000 students since 1922 when it was initially started, meaning the idea is not a brand new one.
The loans are paid back with interest just like other crowd funded personal loans online websites such as Prosper.
Between federal and private
From the information available on MarketWatch, Daily Finance and Bankrate, community-based school loans, or rather student loans from community student or university aid associations, fit somewhere between federal school loans and private loans cost-wise.
The cost of going to a community bank or credit union for a private loan is higher than going to Sallie Mae normally. Sallie Mae accounted for 46 percent of all Consumer Financial Protection Bureau complaints made about school loans.
Depending on the community-based student loan organization, interest could be anywhere from nothing to eight percent, according to MarketWatch. The catch is that the loans generally require a massive piece of collateral, such as a parent's home, and have much harsher terms. Federal Stafford loans have the very best rates and Private loan rates can be as high as 16 percent.
Just for tuition and books
The small organizations do not have a lot of cash to them, which is why the loans are usually pretty small. It is enough to cover tuition and books, but typically it is not much more than that, according to Bankrate.
Credit unions likewise may be able to arrange some financing for university, though it might come in the form of a "personal loan for educational purposes." However, they also might lend at better terms than a private lender. Numerous credit unions are also, according to CBS, offering student loan consolidation programs. Each student and/or their parents will have to do their homework on community loan organizations and credit unions in their area to learn more.
Organizations all over
Students who are likely to university and need some cash to do it might be able to get a community-based student loan depending on the area they go, according to a Daily Finance article. These community organizations are showing up all over the country, and MarketWatch has the majority of the details.
It's not dissimilar to the more recent phenomenon of "crowd funding" or "crowd sourcing," in that donors are solicited for funds. They throw a certain amount into a communal pot, from which loans are made.
The Canton Student Loan Organization of Canton, Ohio has lent $27 million to over 5,000 students since 1922 when it was initially started, meaning the idea is not a brand new one.
The loans are paid back with interest just like other crowd funded personal loans online websites such as Prosper.
Between federal and private
From the information available on MarketWatch, Daily Finance and Bankrate, community-based school loans, or rather student loans from community student or university aid associations, fit somewhere between federal school loans and private loans cost-wise.
The cost of going to a community bank or credit union for a private loan is higher than going to Sallie Mae normally. Sallie Mae accounted for 46 percent of all Consumer Financial Protection Bureau complaints made about school loans.
Depending on the community-based student loan organization, interest could be anywhere from nothing to eight percent, according to MarketWatch. The catch is that the loans generally require a massive piece of collateral, such as a parent's home, and have much harsher terms. Federal Stafford loans have the very best rates and Private loan rates can be as high as 16 percent.
Just for tuition and books
The small organizations do not have a lot of cash to them, which is why the loans are usually pretty small. It is enough to cover tuition and books, but typically it is not much more than that, according to Bankrate.
Credit unions likewise may be able to arrange some financing for university, though it might come in the form of a "personal loan for educational purposes." However, they also might lend at better terms than a private lender. Numerous credit unions are also, according to CBS, offering student loan consolidation programs. Each student and/or their parents will have to do their homework on community loan organizations and credit unions in their area to learn more.
