No. 4: Plead your case
If a bank says no, it might have nothing to do with you at all, says Kevin Michaelsen, director of financial assistance for Meredith College in Raleigh, N.C.
"Some of the lenders out there are not approving loans for institutions that have a historically high default rate, especially for-profit schools," he says. "It might be very difficult to get a loan to attend a school with a low graduation rate, too."
For students who attend red-flag institutions as well as those who attend community colleges and low-cost schools that won't require enormous student loans, Michaelsen recommends directly addressing the situation with your lender and asking if a compromise can be made.
No. 5: Think outside the big guys
Of course, you don't have to go to a bank at all. To find the best loan package, Erin Wolfe, the associate director of financial aid for Susquehanna University in Selinsgrove, Pa., suggests investigating organizations that don't evaluate credit scores.
"For students that have a gap between their financial aid, their federal loans and the cost of college, we have small institutional loans that have been established by donors. Emergency loans are often available at private and public institutions," she says. "There are also certain Web sites that will put you in direct contact with ordinary people willing to fund educational loans."
While institutional loans frequently don't require a credit check, some peer-to-peer lending sites such as Lendingclub.com and Prosper.com do. One of the few sites that doesn't is GreenNote.com -- a peer-to-peer site devoted exclusively to student loans. It provides an infrastructure where friends, family members and benevolent strangers can fund low-interest microloans for needy students, the sum of which should add up to the cost of college. Students get a fixed-rate loan capped at the same interest rate as a federal unsubsidized Stafford loan without a credit check, co-signer or restrictions on where they can attend school. Friendly funders get a legally binding agreement that they will be repaid bit by bit starting six months after the student graduates.
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