School loans have been an item of concern lately, not only because of the amazing pace of growth in debt amounts but additionally in interest rates assessed on them. There are some options beyond private loans or subsidized loans, such as community-based school loans, which are gaining traction.
Community-based school loans, another instance of crowd sourcing
A recent Daily Finance article discussed a growing number of community organizations springing up around the country, offering community-based student loans that are being made to students heading off to college, albeit without a ton of details. However, the MarketWatch article Daily Finance quoted did have a few more details.
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.
Prosper is a crowd funded personal loans site. Just like those loans, these ones have interest and have to be repaid by the students.
Between federal and private
The community-based student loans fit between federal school loans and private loans with regards to cost, according to Daily Finance, Bankrate and MarketWatch.
A loan from a community association, community bank or credit union is still a private loan, but it's generally lower-cost than going to Sallie Mae, which according to CBS accounted for 46 percent of all grievances made to the CFPB about school loans all on their lonesome.
Private loans can 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.
Paying for the rest
The idea of the community-based school loans is to help students cover tuition and books. They are not enough to help pay for all other college expenses, according to Bankrate. The federal government has a lot more cash than small organizations.
You might want to go to a credit union for their loan consolidation programs, and there are also programs similar to these ones that offer college funding, according to CBS. The terms are generally pretty good. Make sure parents and students are both doing the research to determine what is best.
Community-based school loans, another instance of crowd sourcing
A recent Daily Finance article discussed a growing number of community organizations springing up around the country, offering community-based student loans that are being made to students heading off to college, albeit without a ton of details. However, the MarketWatch article Daily Finance quoted did have a few more details.
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.
Prosper is a crowd funded personal loans site. Just like those loans, these ones have interest and have to be repaid by the students.
Between federal and private
The community-based student loans fit between federal school loans and private loans with regards to cost, according to Daily Finance, Bankrate and MarketWatch.
A loan from a community association, community bank or credit union is still a private loan, but it's generally lower-cost than going to Sallie Mae, which according to CBS accounted for 46 percent of all grievances made to the CFPB about school loans all on their lonesome.
Private loans can 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.
Paying for the rest
The idea of the community-based school loans is to help students cover tuition and books. They are not enough to help pay for all other college expenses, according to Bankrate. The federal government has a lot more cash than small organizations.
You might want to go to a credit union for their loan consolidation programs, and there are also programs similar to these ones that offer college funding, 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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