Federal Stafford Loans Not Enough This Year? Fill the Gap

Whether yourre nearing the end of the semester or quarter this year in college, you may find yourself in a precarious position: your Federal Stafford Loans you thought would cover your cost of attending college this year aren't going as far as you had originally intended. The good news is that whether you are an undergraduate or graduate student, you have options to cover the gap in paying for your remaining college costs. Here's how:

Undergraduate
You already accepted what you wanted out of your school's financial aid award (yes we fully realize that you most likely accepted anything you could get your hands on back in the summer months).

As a result, you have exhausted your Federal Stafford Loans available to you but you are still in need of more funds to cover the remaining costs. You have two options:

1. Your first option if you are a dependent undergraduate student is for one of your parents to cover the remaining costs by taking out a Federal Parent PLUS loan. While there is a credit check, Parent PLUS loans are currently at a fixed interest rate and don't have near the stringent credit checks that a private/alternative loan typically has.

2. If your parents would prefer not to borrow a Federal Parent PLUS loan or they have already exhausted this option, one of the last options you have remaining is a Private/Alternative Loan. Unlike your Federal Stafford loans these are not federal loans. What that means is you'll most likely need a co-signer for this loan (Hey Mom or Dad!)...with good credit. On top of that, because of the crisis facing our financial system, many organizations have raised the credit scores required to qualify for these types of loans.

As with any financial situation regarding college, we recommend that you contact your financial aid counselor and your current lender for more information on ways to fill the remaining gap in financing your education for the year remaining. 
 

Graduate
You already accepted what you wanted out of your school's financial aid award (yes we fully realize that you most likely accepted anything you could get your hands on back in the summer months).

As a result, you have exhausted your Federal Stafford Loans available to you but you are still in need of more funds to cover the remaining costs. You have two options:

1. Unlike undergraduate students, you no longer have to depend on your parents to cover the remaining college costs. (It depends on your point of view on whether this is a good thing or bad thing). Your first option in covering the remaining gap is a Graduate PLUS loan. While there is a credit check, Grad PLUS loans are currently at a fixed interest rate and don't have near the stringent credit checks that a private/alternative loan typically has.

2. If you've exhausted your Grad PLUS loan, your remaining option (other than become independently wealthy) is a Private/Alternative Loan. Unlike your Federal Stafford loans these are not federal loans. Which means, you may need a co-signer for this loan (Hey Mom or Dad!)...with good credit. On top of that, because of the crisis facing our financial system, many organizations have raised the credit scores required to qualify for these types of loans.