School loans have been an item of worry lately, not only due to the amazing pace of increase in debt levels but additionally in interest rates assessed to them. There are some options beyond private loans or subsidized loans, such as community-based school loans, which are getting traction.
Organizations all over
A recent Daily Finance article discussed a growing number of community organizations springing up around the country, offering community-based school loans that are being made to students heading off to college, albeit without a lot of specifics. However, the MarketWatch article Daily Finance quoted did have a few more specifics.
The donors get solicited for funds with "crowd sourcing," and the program is very similar to that. Loans are given with the cash people put to the communal pot.
MarketWatch pointed out that it is not even a brand new idea since the Canton Student Loan Organization in Ohio has been around since 1922. The organization has given over 5,000 students more than $27 million in loans.
However, just like crowd funded personal loans sites such as Lending Club or Prosper, those loans do have to be paid back with interest.
Between federal and private
Daily Finance, Bankrate and MarketWatch all made it clear that community-based student loans, on the subject of cost, are someplace between federal school loans and private school loans.
A loan from a community association, community bank or credit union is still a private loan, but it's usually lower-cost than going to Sallie Mae, which according to CBS accounted for 46 percent of all complaints made to the CFPB about school loans all on their lonesome.
Private loans could be as high as 16 percent interest, and federal Stafford loans almost always have the very best rates. Community-based loans typically are much harsher and require huge forms of collateral, according to MarketWatch, but interest can range from no interest at all to around 8 percent.
May not cover university
According to Bankrate, community-based student loans might not be enough to cover the total cost of university, but just enough to cover tuition and books. Many of these organizations just do not have the cash to lend the federal government or big banks do.
You may want to go to a credit union for their loan consolidation programs, and there are also programs similar to these ones that offer college financing, according to CBS. The terms are generally pretty good. Make sure parents and students are both doing the research to determine what is best.
Organizations all over
A recent Daily Finance article discussed a growing number of community organizations springing up around the country, offering community-based school loans that are being made to students heading off to college, albeit without a lot of specifics. However, the MarketWatch article Daily Finance quoted did have a few more specifics.
The donors get solicited for funds with "crowd sourcing," and the program is very similar to that. Loans are given with the cash people put to the communal pot.
MarketWatch pointed out that it is not even a brand new idea since the Canton Student Loan Organization in Ohio has been around since 1922. The organization has given over 5,000 students more than $27 million in loans.
However, just like crowd funded personal loans sites such as Lending Club or Prosper, those loans do have to be paid back with interest.
Between federal and private
Daily Finance, Bankrate and MarketWatch all made it clear that community-based student loans, on the subject of cost, are someplace between federal school loans and private school loans.
A loan from a community association, community bank or credit union is still a private loan, but it's usually lower-cost than going to Sallie Mae, which according to CBS accounted for 46 percent of all complaints made to the CFPB about school loans all on their lonesome.
Private loans could be as high as 16 percent interest, and federal Stafford loans almost always have the very best rates. Community-based loans typically are much harsher and require huge forms of collateral, according to MarketWatch, but interest can range from no interest at all to around 8 percent.
May not cover university
According to Bankrate, community-based student loans might not be enough to cover the total cost of university, but just enough to cover tuition and books. Many of these organizations just do not have the cash to lend the federal government or big banks do.
You may want to go to a credit union for their loan consolidation programs, and there are also programs similar to these ones that offer college financing, according to CBS. The terms are generally pretty good. Make sure parents and students are both doing the research to determine what is best.
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