Finding student loans without a cosigner can be difficult, but not impossible. Student loans are the first type of debt that many young consumers become familiar with. This year, the bad economy along with rising tuition rates will mean that many more students than in previous years will be applying for and taking out student loans. Unfortunately, government cutbacks could mean there will be a lot less federal money available. This means that loans from private companies are the only other way to pay for college.
Think Before Doing
Prior to taking out any kind of loans, it is necessary for a student to understand what rules control them. Under federal law, money that is taken is only permitted to be used to make payments for tuition and other costs that are considered by the Department of Education to be directly related to the costs of attending college. For example, items such as the following would be covered:
- textbooks
- laboratory supplies
- housing
- meal plans
- required clothing such as uniforms
On the other hand, indirect expenses, such as transportation or child care are not allowable costs that can be paid for with money from student loans. Therefore, it is recommended by the Department of Education that any student who needs help paying for his or her indirect expenses use his or her private loan or money received as wages to pay these costs.
Private student loans have a lot more flexibility when it comes to what the money can be used for, these are a better choice for some people with a lot of indirect education costs. Qualifying with no cosigner, however, can be a bit of a challenge. This is because most people do not have a long credit history, making them seem like a higher risk for many lenders.