Brianna McGurran is the Loans Analyst for Forbes Advisor. Most recently, she was a staff writer and spokesperson at NerdWallet, where she wrote “Ask Brianna,” a financial advice column syndicated by the Associated Press. As spokesperson, she also contributed her expertise to outlets including The New York Times, ABC World News Tonight and the Today Show.
Brianna McGurran is the Loans Analyst for Forbes Advisor. Most recently, she was a staff writer and spokesperson at NerdWallet, where she wrote “Ask Brianna,” a financial advice column syndicated by the Associated Press. As spokesperson, she also contributed her expertise to outlets including The New York Times, ABC World News Tonight and the Today Show.
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Community college can be an affordable way to earn a special certification, associate’s degree or get a start on your bachelor’s degree. In addition to the lower tuition costs when compared to four-year universities, many states offer free or discounted enrollment at local community colleges. But depending on your circumstances and where you live, you may need some help paying for your education.
Best Student Loans for Community College of 2024
Federal Direct Subsidized Loans
Why We Picked It
Among undergraduate and graduate student loan options, federal direct subsidized loans are the cheapest and most flexible. Only undergraduate borrowers with financial need—as determined by the information in the Free Application for Federal Student Aid, or FAFSA—can get subsidized loans. The government will pay the interest when students are in school, during their grace period and when they put their loans into deferment.
The interest rate on subsidized loans is one of the lowest you’ll find, and no co-signer is required. All eligible undergraduate borrowers qualify and they receive the same rate regardless of credit history. Most importantly, borrowers of federal subsidized loans have access to income-driven repayment options that can lower the amount due and loan forgiveness for those who work in public service fields.
While there is an origination fee of 1.057%, it’s lower than what many private lenders offering loans without a co-signer charge.
Pros & Cons
- Low fixed interest rate
- Multiple repayment and forgiveness options available
- Interest subsidy during certain periods
- Charges an origination fee
- Low annual loan limits
Details
Loan terms: 5, 7, 10, 15 and 20 years
Loan amounts available: $5,000 minimum; no maximum, except for associate’s degree graduates, who can refinance up to $50,000.
Eligibility: Must be enrolled at least half-time in a school that participates in the federal direct loan program. Must be an undergraduate and be determined to have financial need.
Forbearance options: Forbearance available for up to three years in certain circumstances. Enrolling in an income-driven repayment program can lower monthly payments and result in loan forgiveness after 20 to 25 years.
Federal Direct Unsubsidized Loan
Why We Picked It
Federal direct unsubsidized loans offer low fixed interest rates, and this type of loan isn’t credit-based and doesn’t require a co-signer. All eligible undergraduate borrowers qualify, and they receive the same rate regardless of credit history.
While there’s a chance the most creditworthy borrowers could get a lower interest rate with a private student loan, they’ll miss out on a range of consumer protections that might be useful in the future. Borrowers of federal direct unsubsidized loans have access to income-driven repayment options that can lower the amount due and loan forgiveness for those who work in public service fields.
Direct unsubsidized loans come with an origination fee of 1.057%, while most private loans do not. But in many cases, the low interest rate and loan benefits make the fee worth it.
Pros & Cons
- Low fixed interest rate
- Multiple repayment and forgiveness options available
- No co-signer required in order to get lowest rate
- Charges an origination fee
Details
Loan terms: Terms of 10 to 25 years are available, depending on the repayment plan.
Loan amounts: Loan amounts up to $12,500 per year and $57,500 in aggregate in aggregate are available.
Eligibility: You must be enrolled at least half-time in a school that participates in the federal direct loan program.
Forbearance options: Forbearance available for up to three years in certain circumstances. Enrolling in an income-driven repayment program can lower monthly payments and result in loan forgiveness after 20 to 25 years.
Co-signer release policy: N/A
Custom Choice
Why We Picked It
Custom Choice provides private student loans to undergraduate and graduate students. This lender stands out due to its competitive interest rates and no-fee structure; borrowers will never pay late fees, origination fees or prepayment penalties.
Custom Choice also offers a few unique benefits, including a Graduate Reward that reduces your loan’s principal balance by 2% when you get your degree.
Pros & Cons
- No fees, including late or origination fees
- Receive a 2% principal reduction after submitting proof of graduation
- 0.25% interest rate discount when you enroll in autopay
- Not transparent about credit and income requirements
- Co-signer release after 36 months, about 12 months later than many other lenders’ policies
Details
Loan terms: 7, 10 or 15 years
Loan amounts available: $1,000 to $99,999 per year ($180,000 aggregate per borrower)
Eligibility: Does not publicly disclose credit score or income requirements, but you will need to submit proof of income and your monthly housing costs. Depending on your circumstances, students are likely to need a co-signer to qualify.
Forbearance options: Forbearance available for up to 12 months.
College Ave
Why We Picked It
College Ave offers a solid all-around private loan product with a few unique features. Borrowers can choose an eight-year term, which is in addition to the typical five-, 10- and 15-year terms many lenders provide. Borrowers can also access an extended six-month grace period beyond the initial payment-free six months allowed after separating from school.
Pros & Cons
- Interest rate estimate available without undergoing a hard credit check
- International students can qualify with a co-signer who has U.S. citizenship or permanent residency
- Long time period (210 days) before unpaid loans go into default
Details
Loan terms: 5, 8, 10, 15 and 20 years
Loan amounts available: $1,000 up to 100% of the school-certified cost of attendance
Eligibility: Applicants must have a minimum credit score in the mid-600s.
Forbearance options: Up to 12 months of forbearance is available, in three- to six-month increments
Co-signer release policy: Available after 24 payments
*Borrowers with a co-signer who choose the shortest repayment term available and who make full monthly payments while in school qualify for the lowest rates.
1 – College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
2 – All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3 – Cover up to 100% of your cost of attendance as certified by your school and less any other financial aid you might receive. Minimum $1,000.
Rhode Island Student Loan Authority
Why We Picked It
Rhode Island Student Loan Authority, known as RISLA, is a nonprofit based in Rhode Island that lends to students across the country. It offers two different loan types for undergraduate students, which each come with their own fixed interest rates. One loan requires immediate repayment, and one lets you defer payments until six months after you leave school. Everyone who qualifies for each of the loan types gets the same rate, which makes it easy to compare RISLA loans with others you’ve qualified for.
For borrowers who struggle to afford their loan after graduating, RISLA is one of the only private lenders to offer an income-based repayment plan, which limits payments to 15% of income for a 25-year period.
RISLA was a winner of Forbes Advisor’s best private student loans of 2020 awards. Learn more here.
Pros & Cons
- Low interest rates
- Income-based repayment plan available
- Nurses pay 0% interest for 48 months following graduation
- No options for international students
Details
Loan terms: 5, 10 and 15 years
Loan amounts available: $1,500 to $45,000 per year ($150,000 aggregate per borrower).
Eligibility: Applicants must show a minimum income of $40,000 per year and a minimum credit score of 680. Most undergraduate students will need a co-signer to qualify.
Forbearance options: Forbearance available for up to 24 months.
Co-signer release policy: Available after 24 months of payments. Periods during which borrowers use income-based repayment do not qualify.
Citizens Bank
Why We Picked It
Citizens Bank’s parent loan offers comparatively low interest rates, and borrowers can qualify for an interest rate discount of up to 0.50% if they have an existing account with the bank. (Student loans are available in all states, but checking and savings accounts are only available in Connecticut, Delaware, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont.)
Citizens Bank also offers a relatively rare loan modification program, introduced in spring 2020, that allows for reduced monthly payments for a period of 12 months. That’s in addition to the industry-standard 12 months of forbearance.
Pros & Cons
- Maximum interest rate under 10%
- Loan modification option in addition to standard forbearance
- No origination fee
- No rate estimate available without soft credit check
- Non-U.S. citizens cannot apply
Details
Loan terms: 5 or 10 years
Origination fee: None
Loan amounts available: $1,000 to $350,000
Eligibility: Parent applicant and student must be U.S. citizens. Student must attend school at least half-time.
Forbearance options: Up to 12 months throughout the life of the loan, provided in two-month increments.
SoFi®
Variable APR
5.99% to 14.70%
with autopay and rate sale discount
Fixed APR
4.44% to 14.70%
with autopay and rate sale discount
5.99% to 14.70%
with autopay and rate sale discount
4.44% to 14.70%
with autopay and rate sale discount
Why We Picked It
SoFi is perhaps best known as a student loan refinance lender, but it also makes loans to undergraduates, graduate students, law and business students and parents. Its undergraduate student loan product offers mostly industry-standard features, plus a few perks: no late fees, an interest rate discount of 0.125% if your co-signer already uses another SoFi product and job search help through its career team.
Pros & Cons
- Access to SoFi member benefits
- No late fees
- Interest rate estimate available without undergoing a hard credit check
Details
Loan terms: 5, 7, 10 and 15 years.
Loan amounts available: $1,000 up to the total cost of attendance.
Eligibility: Does not disclose credit score or income requirements.
Forbearance options: Qualified borrowers can take up to 12 months total forbearance.
Co-signer release policy: Available after 24 payments.
Summary: Best Student Loans for Community College
Are Community Colleges Free?
Not all community colleges are free, but they are more affordable than private nonprofit colleges and four-year public colleges. In 2021-22, average tuition and fees at community colleges was $3,800 per year, according to the College Board, compared to $10,740 at four-year public institutions for in-state students and $38,070 at four-year private institutions.
But depending on where you live, community college may be completely free. Currently, more than half of states have free college tuition programs, according to the Campaign for Free College Tuition. But many of those initiatives require participants to be a certain age, pursue certain types of degrees, meet income limits, maintain a minimum GPA or satisfy other criteria.
Of the states with these programs, nine—Connecticut, Delaware, Michigan, Maryland, Nevada, New Mexico, Oregon, Rhode Island and Tennessee—offer programs without stringent eligibility requirements, according to an analysis by the Campaign for Free College Tuition.
How to Get a Student Loan for Community College
Getting a student loan for community college follows the same process as seeking a loan for a four-year school. First, submit a Free Application for Federal Student Aid (FAFSA) to qualify for federal and state financial aid. List your desired school on the form so that it receives your information directly.
When you apply and are accepted for admission, the community college will provide you with an award letter noting how much financial aid you’ve received. If you need loans to cover a gap in funding, your award letter may detail federal loan options available to you. You can accept or reject these loans depending on your needs.
Private Loans vs. Federal Loans for Community College
If grants, scholarships, savings and other sources of aid don’t cover all your community college costs, consider federal student loans before turning to private loans. Federal loans come with lower interest rates and more generous repayment options.
For example, subsidized federal loans, available for those with demonstrated financial need, don’t charge interest during the post-graduation grace period or periods of deferment. Federal loans also come with income-driven repayment plans, which can make your monthly payments more affordable if your earnings are less than you expected after graduation.
Private loans are best reserved for situations when you’ve maxed out your federal loan options and still need money for school. In the case of community college, when costs are generally lower than at other types of schools, it’s more likely that federal loans will cover any funding gaps.
Methodology
We scored 12 lenders across 22 data points in the categories of interest rates, fees, loan terms, hardship options, application process and eligibility. We chose the seven best to display based on those earning 3.5 stars or higher.
The following is the weighting assigned to each category:
- Hardship options: 20%
- Interest rates: 20%
- Application process: 20%
- Loan terms: 15%
- Fees: 15%
- Eligibility: 10%
Specific characteristics taken into consideration within each category included eligibility requirements, economic hardship repayment options, interest rate discounts, disclosure of credit score and income requirements and other factors.
Lenders who offered interest rates below 10% scored the highest, as did those who offered more than the standard 12 months of forbearance, who offered interest rate discounts beyond the standard 0.25% for automatic payments, who offered multiple loan terms and who charged minimal fees.
In some cases, lenders were awarded partial points, and a maximum of 5% of the final score was left to editorial discretion based on the quality of consumer-friendly features offered.
Compare Student Loan Rates In Minutes
Compare rates from participating lenders via Credible.com
Frequently Asked Questions (FAQs)
What is the average student loan debt for community college?
Not all students take out student loans to attend community college. In fact, just 17% of full-time students at public two-year institutions took out loans in 2019-20, according to the National Center for Education Statistics.
Of those who did take out loans, associate’s degree holders at public schools borrowed an average of $16,800 in federal student loans throughout their degree program, according to the National Center for Education Statistics. Completers of certificates at public schools borrowed $13,700 in federal student loans.
Do the majority of community college students qualify for federal student loans?
Your eligibility for federal aid depends on certain factors determined by the U.S. Department of Education, which apply to all students regardless of the type of institution they choose. In order to get federal student loans, all college students must attend school at least half-time. You must also be a U.S. citizen or eligible noncitizen.
But as a community college student, you may not need to take out loans at all. Among students attending public two-year colleges full-time in 2019-20, 80% received some form of financial aid, with 60% receiving federal grants and 46% receiving state or local grants, according to the National Center for Education Statistics. Grants do not need to be repaid. Of those receiving financial aid, 17% took out student loans at an average amount of $4,804 in 2019-20.
What kind of loans can a college student get?
There are two main types of student loans: federal and private. Federal loans are administered by the government, while private loans are offered by banks, credit unions and online lenders.
There are several types of federal loans to choose from, including direct loans made to undergraduate or graduate students and PLUS loans made to graduate students or parents. The type of direct loan you qualify for—subsidized or unsubsidized—will depend on your financial need and whether you’re an undergraduate or graduate student.
How do I qualify for a college loan?
To qualify for federal student loans—which generally come with more favorable terms than private loans—you must first submit the FAFSA. From there, your school will determine how much financial aid you’re eligible for and whether student loans will be part of your financial aid package.
If you need private student loans after borrowing the maximum allowable amount in federal loans, you can apply directly with a private lender like a bank or credit union. Private student loans will require a credit check.
How much do most community colleges cost?
The average cost of full-time tuition, fees, room and board at public two-year colleges in 2021-22 was $13,130, according to the College Board. Tuition and fees alone cost $3,800 per year. If you attend part-time, your costs will likely be lower. Plus, since many states offer free or reduced-price community college programs, you may not be required to pay for tuition or fees at all.
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