How To Pay for College With Bad Credit

Earning a college degree opens doors to amazing career opportunities, but it comes at a cost. It's not always easy to cover tuition and fees out of pocket. Paying for college can be even more challenging if you need a student loan but have bad credit.

Fortunately, college students with not-so-great credit histories still have financial aid options to consider. Some ways to pay for college with bad credit include:

• applying for federal student aid
• participating in a tuition reimbursement program
• securing scholarships.

Below, we'll explore numerous ways to cover college costs, even if you have poor credit or no credit. We'll also look at what you can do if you're denied a student loan due to an adverse credit history.

Can You Be Denied Student Loans Because of Bad Credit?

Yes, it's possible to be denied a student loan because of bad credit. Private student loans acquired from banks and credit unions use credit reports and history to decide who they'll approve.

Without a good credit score, you could be denied. Professional and graduate students borrowing federal Direct PLUS Loans could also be denied a loan if a credit check shows an adverse credit history.

The good news is approval is possible for students with poor credit who add an endorser or cosigner with good credit to their loan application. Graduate and professional students seeking grad PLUS loans could also be approved if they prove that extenuating circumstances contributed to their adverse credit history.

What Is the Minimum Credit Score for a Student Loan?

If you're pursuing a federal or private student loan that requires a credit check, your minimum credit score should typically land in the ''good'' range. Private lenders have different credit score requirements for private loans, but a FICO score of 670 or higher is generally accepted.

This doesn't mean that a student without a high enough FICO score should give up their pursuit of a college education. You can always seek different types of college financing options. For instance, most federal student loans don't require credit checks, making them some of the best ones to consider. You could try the following:

• Direct Subsidized Loan (for undergraduate students with financial need)
• Direct Unsubsidized Loan (for undergraduate, graduate, and professional students)
• Direct Consolidation Loans (for students with multiple loans who want one monthly payment, a fixed interest rate, and access to loan forgiveness options)

Keep in mind that these federal student loans must be repaid with interest. Repayment terms and interest rates vary by lender. Now that you know about student loan options for borrowers with bad credit, let's explore additional ways to pay for school.

10 Tips for Paying for College With Bad Credit

Bad credit shouldn't deter you from pursuing a college degree. Here are 10 ways to pay for college if you have poor or no credit.

1. Apply for Federal Student Aid

Applying for federal student aid from the U.S. Department of Education is one of the most popular ways to pay for college. You must complete the Free Application for Federal Student Aid (FAFSA) application form to access federal grants, loans, and other financial aid.

Eligibility is open to U.S. citizens and lawful permanent residents who demonstrate financial need and are enrolled in a degree or certificate program at an eligible school.

2. Research Scholarships

Scholarships are financial awards that don't require repayment. Types of scholarships include:

• Merit-based: granted to students who meet or exceed certain standards (ex., grades or special talents)
• Financial-need-based: awarded to students who showcase financial need
• Group-based: for students associated with specific groups (ex., women or military personnel)

Thousands of scholarships are available from colleges, nonprofits, religious groups, private businesses, financial institutions, and individuals. You can research these entities or explore sites like the government-sponsored CareerOneStop.org to find scholarships.

3. Explore Eligible Grants

Federal grants are forms of financial aid often given to students with financial need. They include:

• Pell Grants
• Federal Supplemental Educational Opportunity Grants (FSEOG)
• Teacher Education Assistance for College and Higher Education (TEACH) Grants
• Iraq and Afghanistan Service Grants

A federal grant typically doesn't require repayment. To qualify, students must fill out the FAFSA form.

4. Work Part-Time

Working part-time while enrolled in a degree program is another great way to pay for school. According to the National Center for Education Statistics (NCES), 40% of full-time undergraduates and 74% of part-time undergraduates worked while enrolled in 2020.

Students can find part-time employment on or off campus. They might also qualify for the Federal Work-Study Program, which includes part-time work in the financial aid package. Students must fill out the FAFSA form to qualify.

5. Work During the Summer

If you don't have time to work during the academic year, consider working part-time or full-time during the summer. When not enrolled in school, you'll have more time to earn and save money for the fall and spring semesters.

6. Consider Parent PLUS Loans

A parent PLUS loan is a federal Direct PLUS Loan available to parents of undergraduate students enrolled at least half-time at an eligible school. Qualifying borrowers must not have an adverse credit history and must meet general federal student aid eligibility requirements.

Parents who take on these PLUS loans can expect loan terms that include a fixed interest rate and a loan amount equal to the cost of attendance minus other financial assistance. Repayment options include standard, graduated, and extended plans.

Payments start after the loan has been fully dispersed unless you request a deferment or forbearance to delay payment. With these options, your student loan lender might allow you to make interest-only payments or adjust your repayment plan to secure lower payments.

7. Discover Private Student Loan With a Co-Signer

Student loan providers like Sallie Mae and Ascent sometimes require students with bad credit and international students (including DACA recipients) to add a creditworthy cosigner to their private student loan application.

A creditworthy cosigner is an adult willing to share responsibility for repaying the loan. If a student doesn't pay on time or stops making payments, the cosigner will be responsible for the loan.

Fortunately, after a student graduates, they can apply for a cosigner release to remove the cosigner from the loan and relinquish their responsibility. This typically occurs after the borrower meets credit requirements and makes a certain number of on-time payments.

8. Military Service

Military service members who want to pay for college but have bad credit can choose from numerous financial aid options. Some include the following:

• GI Bill
• Department of Defense (DoD) Tuition Assistance (TA) program
• Reserve Officers' Training Corps (ROTC) scholarships
• financial aid from veteran service organizations like AMVETS and Paralyzed Veterans of American

Individuals related to military personnel can also receive financial assistance. For example, an offspring of a military service member who died in Iraq or Afghanistan after the events of 9/11 can receive the maximum amount for the Pell Grant or the Iraq and Afghanistan Service Grant.

Learn more: Does the Military Pay for College?

9. Employer Tuition Reimbursement

Tuition reimbursement programs are a common workplace benefit. Employers reimburse some costs for college courses or continuing education credits after completing coursework.

Students who aren't sure how to cover school costs before being reimbursed could consider personal loans or credit cards designed for people with poor credit. At the end of the semester, you could use your reimbursed funds to repay the borrowed funds.

10. Seek State and Institutional Aid

States commonly offer financial aid (grants, loans, and scholarships) to help residents reduce educational costs. To qualify, you might need to fill out a FAFSA form or a separate application required in your state.

You could also qualify for institutional aid like grants, loans, and work-study from your selected college or university. Eligibility might be based on citizenship, residency, financial need, or other factors.