Student loans with no cosigner are an integral part of the Department of Education’s $115 billion dollar college loan program budget in the year 2013. Prospective college students eager to start their foray into the real world exhibit an unmistakable disadvantage when seeking money for school; the disadvantage being little or no creditworthiness through previous borrowing history. Given the young age of many college students, this proves reasonable overall, however, finding loans for school can be difficult.
Many students find themselves unable to cover the costs associated with their post-secondary education through the FFELP and the FDSLP for several notable reasons.
Important factors when expecting government financial aid to fund college expenses include:
• Government loan programs limit maximum borrowing amounts
• Government loan programs operate on a need-basis
• Government loan eligibility includes parent and student assets and income
• Government loan programs have specific application deadlines annually
• Government loans from the FFELP could require cosigners for beneficial interest rates
Lenders will require financially untested borrowers to provide a cosigner for their loan agreements, however, with professional student loan assistance, finding student loans with no cosigner is quite simple. The federal government understands the precarious or nonexistent nature of college students’ credit, and through the two federal student aid programs, the FFELP and the FDSLP, students can acquire money for college regardless of not having a cosigner.
For example, the entire FDSLP does not require cosigners for any of the $15.1 billion dollars in Stafford Loans or $1.7 billion dollars in Perkins Loans offered to students according to the Department of Education budget report in 2010. In addition, the FFELP offers much more lenient lending practices in regards to student lenders seeking subsidized and unsubsidized Stafford and Perkins Loans through the affiliated private lenders.
This leniency is due to the fact the United States government currently insures defaulted loan amounts up 97 percent of the remaining loan balances in accordance with The College Cost Reduction and Access Act. Students must be aware of several factors before deciding the Department of Education’s loan programs are the ultimate disperser of student loan aid.
Many students and their parents, given the constraints of federal financial aid, simply earn too much money to receive government loans regardless of their unique financial liabilities and expenses. In other cases, maximum lending amounts cannot cover the cost of tuition at public universities and colleges let alone private post-secondary schools. For example, for the Stafford Loan from both the FFELP and the FDSLP mandate the maximum borrowing amount for dependent undergraduates at $23,000 in 2014, and for the Perkins Loan, the government caps the borrowable amount at a maximum of $20,000.
Considering the average cost of the least expensive option of attending a public, in-state university as a four-year undergraduate, according to the College Board, is $24,740 in 2013, even students awarded need-based financial aid face pertinent questions concerning covering the funding gap in their education. Many students find the private banking institutions offer the answers to finding student loans with no cosigner.
In cases where federal funding simply is not enough, banking institutions offer students to flexibility to fund tuition expenses with maximum lending amounts if approved for loans. Private banking institutions also do not require filing the lengthy FAFSA form, because this form of loan is not associated with the Department of Education and is not awarded based on financial need merits.
In addition, the annual deadlines, which can prevent students from even receiving aid if missed, are not applicable to banking institutions in any fashion, as loans are available year around. Clearly, for some students caught between having too much money for federal financial aid and too little money to pay for college, turning to the private banking industry is a great escape.