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If your credit is damaged in any way, you may have a difficult time finding a student loan. I've been in that exact same position at one time, and there is hope for you too. What I did was apply for the Federal Stafford loan. Applying is fairly easy and you can get an answer back quickly. The other option I would suggest as far as government student financing assistance, is to research the Federal Perkins student loan.

Federal Perkins loans are advanced via participating schools to undergraduate and graduate/professional students - whereas the Stafford Government loans are for undergraduate or graduate/professional students made through one of two U.S. Department of Education programs. (D.O.E)

1)The William D. Ford Federal Direct Student Loan Program - know as Direct Stafford Loans or Direct Loans

2)The Federal Family Education Loan (FFEL) Program - know as FFEL Stafford Loans (Federal Stafford loans)

There is another option students have if they are burdened with bad credit, and they are called PLUS Loans. Plus Loans are financing parent(s) may acquire for their undergraduate children. Their children must be dependant children, mind you. These PLUS LOANS are acquired through the Direct Loan or the FFEL student loan program.

Students requiring financing with a poor credit history, would likely find their best chances are seeking a federal Government loan. There are some facts you want to know regarding federally sponsered student loans; There are two distribution channels for Federal student loans. The channels are identified by their names: Federal Direct Student Loans and Federal Family Education Loans. Federal Direct Student Loans, also known as Direct Loans, or FDLP loans are funded from public capital originating with the U.S. Treasury.

FDLP loans are distributed through a channel that begins with the U.S. Treasury Department, and from there passes through the U.S. Department of Education, then to the college or university and then to the student. Federal Family Education Loan Program loans, also known as FFEL loans or FFELP loans, are funded with private capital provided by banking institutions (ie: banks, savings and loans, and credit unions). Because the FFELP loans use private capital as their source, students who use FFELP loans are able to take advantage of payment options that are similar to those available to customers who take out a home loan or a consumer loan. For example, some institutions will allow a discount for automatic payments, or a series of on-time payments. In 2005, approximately 2/3 of all federally subsidized student loans are FFELP.

The maximum amount that any student can borrow is adjusted from time-to-time as Federal policies change. A study published in the Winter, 1996 edition of the Journal of Student Financial Aid, titled “How Much Student Loan Debt is Too Much” suggested that debt for the average undergraduate should not exceed 8% of total income after graduation. Some financial aid advisors have referred to the 8% level as “the 8% rule.” Circumstances vary for individuals, so the 8% level is an indicator, but I would suggest if you are still in a bad credit situation, you want to lower that percentile.

For Private Loans it is far simpler. The lender generally disburses the money directly to the school. Any funds borrowed beyond tuition and fees is given to the student for living expenses, room, board, etc.

Regardless of your choice (Federal or Private), you must look into understanding your credit rating. What you want to do is check out your credit score by going to a site like www.myfico.com, and get yourself a credit report.

Once you have a complete credit score for yourself, you should then venture out and try to acquire student financing. For government student loans you should check out the Federal Stafford loan and the Federal Perkins loan.

Now, for a last resort, you can try some of the other bad credit lenders available online and offline. Be careful to make sure you read all the small print and don't get caught up in any ridiculous terms and high interest rates. When you are finally finished your education, be sure to keep your financial nose clean. All the very best to you in your future endeavors and your educational quests.

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Student loan with a decent credit rating (not amazing...just decent):
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