There are such things as community-based school loans, which many might not be aware of. Essentially, some areas have groups which take donations to give students money, a lot like crowd funding.
Community-based school loans, another instance of crowd sourcing
A recent Daily Finance article discussed a growing number of community associations springing up around the country, offering community-based school 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.
It's not dissimilar to the more recent phenomenon of "crowd funding" or "crowd sourcing," in that donors are solicited for funds. They throw a certain amount into a communal pot, from which loans are made.
According to MarketWatch, it's not even brand new; one such organization, the Canton Student Loan Organization of Canton, Ohio, has existed since 1922 and has lent $27 million to more than 5,000 students.
Prosper is a crowd funded personal loans site. Just like those loans, these ones have interest and have to be paid back by the students.
Between federal and private
Daily Finance, Bankrate and MarketWatch all made it clear that community-based school loans, when it comes to cost, are someplace between federal school loans and private school loans.
The CFPB got 46 percent of its student loan grievances from Sallie Mae, which is pretty e expensive for private loans. You can also get private loans from a credit union or community bank, though they are typically cheaper.
Depending on the community-based student loan organization, interest can be anywhere from nothing to eight percent, according to MarketWatch. The catch is that the loans usually require a huge piece of collateral, such as a parent's home, and have much harsher terms. Federal Stafford loans have the best rates and Private loan rates could be as high as 16 percent.
May not cover college
The idea of the community-based student loans is to help students cover tuition and books. They are not enough to help pay for all other college expenditures, according to Bankrate. The federal government has a lot more cash than small organizations.
Credit unions likewise may be able to arrange some financing for university, though it might come in the form of a "personal loan for educational purposes." However, they also might lend at better terms than a private lender. Numerous credit unions are also, according to CBS, offering student loan consolidation programs. Each student and/or their parents will have to do their homework on community loan organizations and credit unions in their area to get more information.
Community-based school loans, another instance of crowd sourcing
A recent Daily Finance article discussed a growing number of community associations springing up around the country, offering community-based school 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.
It's not dissimilar to the more recent phenomenon of "crowd funding" or "crowd sourcing," in that donors are solicited for funds. They throw a certain amount into a communal pot, from which loans are made.
According to MarketWatch, it's not even brand new; one such organization, the Canton Student Loan Organization of Canton, Ohio, has existed since 1922 and has lent $27 million to more than 5,000 students.
Prosper is a crowd funded personal loans site. Just like those loans, these ones have interest and have to be paid back by the students.
Between federal and private
Daily Finance, Bankrate and MarketWatch all made it clear that community-based school loans, when it comes to cost, are someplace between federal school loans and private school loans.
The CFPB got 46 percent of its student loan grievances from Sallie Mae, which is pretty e expensive for private loans. You can also get private loans from a credit union or community bank, though they are typically cheaper.
Depending on the community-based student loan organization, interest can be anywhere from nothing to eight percent, according to MarketWatch. The catch is that the loans usually require a huge piece of collateral, such as a parent's home, and have much harsher terms. Federal Stafford loans have the best rates and Private loan rates could be as high as 16 percent.
May not cover college
The idea of the community-based student loans is to help students cover tuition and books. They are not enough to help pay for all other college expenditures, according to Bankrate. The federal government has a lot more cash than small organizations.
Credit unions likewise may be able to arrange some financing for university, though it might come in the form of a "personal loan for educational purposes." However, they also might lend at better terms than a private lender. Numerous credit unions are also, according to CBS, offering student loan consolidation programs. Each student and/or their parents will have to do their homework on community loan organizations and credit unions in their area to get more information.
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