Financial Advice: Can You Still Get A College Loan With Bad Credit?

Poor credit should not prevent you from applying and getting student loans to pursue your educational goals.

Can you still get a student loan with bad credit? Many people might believe that the answer is no. However you would be surprised just how easy it is to actually get approved. Find out how you can be studying for the degree of your dreams by next semester.

For starters, one should never let financial restraints keep you from getting a quality education. Many believe this is an inalienable right. Thanks to many government agencies they are making this dream a reality. Once you decide to attend school for a degree you'll then need to decide on the school you want to attend. At this point you should schedule an appointment with the school's admissions department for an interview.

Once you have the interview with the admissions department, one of the people you will undoubtedly meet with is the financial aide representative. Once you meet with them they will evaluate your financial needs in determining the amount of aide you can qualify for. What many people are unaware of is the fact that many, if not all, of the student loan programs are backed by the Federal Government. Said another way, Uncle Sam will guarantee the value of the student loans with the banks.

The funds for student loans are paid by a number of different ways, like banks, savings and loans, credit unions, etc. All federally guaranteed loans fall under three main categories; Ford Direct Lending programs (FDLP), Campus loan programs, and Federal Family Education Loan Program (FFELP). Under FDLP, these are loans that are given directly by the federal government. The repayment is made back to the federal government.

With Campus Loans, a certain amount is given annually to institutions which are in turn loaned out to students, paid back to the institutions, and re-loaned to other needy students. They are sometimes referred to as Perkins Loans or National Direct/Defense Student Loans.

FFELP loans are made possible thanks to the Department of Education. The department issues through your school a list containing an approved network of commercial lenders who provide loans to students. These loans are most often labeled as direct loans, Stafford loans, Guaranteed Student loans, Federal Insured Student loans, Plus loans, SLS loans, and consolidation loans.

Since the loans given by commercial institutions are backed by the Federal government, should you default on the loans, the federal government would repay the commercial lender in full. So with this said, the banks would have no risk to them what so ever. Once the government pays your loan, you would now be liable to the government for the repayment of the loan. Student loans cannot, by law, be discharged, even by bankruptcy. Continued default would also lead to damaged credit, additional collection fees of up to 25% in some cases, loss of income tax refunds, garnishment of wages, and even lawsuits filed against you. Undoubtedly the money would be paid back, one way or another. Bottom line, even with bad credit you can apply for student loans and get approved. And it is made possible thanks to Uncle Sam.

Trending Now

© High Speed Ventures 2011