How to get a student loan for community college

Following the spread of coronavirus, many college students have taken steps to change up their education plans as they struggle to manage sudden financial hardships. Specifically, more students are seeking schools closer to home and considering a two-year college over the traditional four-year option, which begs the question: What to do about their school loans?

After all, these schools are still a financial commitment. Fortunately, the process of paying for college is largely the same, no matter which type of educational programs you choose. Read on below to learn more about how the pandemic is affecting college planning, as well as students' chances of receiving financial aid.

The process of financing a two-year college degree

Even though a two-year college degree costs much less than other options, there’s a chance that you still may need to finance all, or part of, your education. With that in mind, here is a closer look at how the process works:

Applying for private student loans

If your community college does not accept federal aid, or if you’ve already reached your federal student loan limit, your best bet will likely be to apply for a private loan. However, private student loans don’t have income-based repayment options or as many deferment options as federal student loans.

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You can also use their student loan calculator to get a better idea of what your monthly payment could be.

Applying for financial aid

The process of receiving federal student loans to go to community college is the same as it would be for a four-year institution. You need to fill out a loan application -- specifically, the Free Application For Federal Student Aid (FAFSA).

The form needs to be filled out each year that you intend to apply for government loans and it uses information about you and your family to determine what, if any, government loans or grants match your needs.

It’s important to note that not all two-year colleges accept federal student loans. In fact, according to the Community College Review, these loans are unavailable at around 20 percent of two-year public schools. With that in mind, you’ll want to check in with your community college before you apply.

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Additionally, be aware that there is a limit to how much federal student loan assistance you can receive. The limit is $31,000 for dependent students, or those whose parents still support them financially, and $57,000 for independent students.

That limit stays the same throughout the course of your education, so be aware that if you do use some federal aid for community college, you will have less money to work with when it’s time to apply to a four-year school.

How the CARES Act will affect financial aid

Part of the federal government's CARES Act was designated to provide additional aid to students. Of the $14 billion that was designated to go to colleges and universities, $6 billion will go directly to student financial aid for the coming school year.

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As for how this money will affect financial aid, it depends on the institution. Some are using the funds to provide extra assistance to the students most in need and others are using it to provide extra scholarships and work-study grants. You’ll want to check in with your local community college to see if they’ve received aid and how they are choosing to allocate the funds.

Choosing a two-year college can be a cost-saving measure

For many, choosing a two-year college is about reaping cost savings. According to the College Board’s 2019 Trends In College Pricing Report, the average cost of attending a public, two-year community college when you’re in-district was just $3,730 for the 2019-2020 school year. In comparison, that same year, attending a four-year in-state institution cost $10,440 and a private four-year school cost $36,880.

While that cost differential -- and the amount of student debt it can lead to -- is significant on its own, it’s even more pronounced at a time when unemployment numbers are high and students aren’t allowed to have the traditional college experience due to stay-at-home measures and social distancing.

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As Pierre Huguet, CEO and co-founder at H&C Education, an educational consulting agency in the New York City area, puts it: “Distance learning is definitely not the ultimate college experience. Many of my students keep telling me, ‘This isn't what I signed up for!’ and they’re right. Remote learning just isn't as exciting or fulfilling as a campus experience that allows students to interact with peers and faculty.”

He also says, since the process behind remote learning is largely the same, no matter which institution you choose to attend, many of the families he works with are balking at the idea of paying full tuition.

Instead, they’re looking at community colleges and associate’s degree or certificate programs as a way to save money and to take care of general education requirements before eventually moving on to another school.