Though no interest student loans are rare, they are available through some charities, colleges, and organizations. Many of these no interest student loans are offered only to those within a certain geographical region, those of a certain faith, or those enrolled in a specific program. The majority of college students will not qualify for a no interest or interest free student loan, and should start with the next best thing, a low interest student loan, available by filing a FAFSA. In order to determine if there are any interest free student loans available to you, start by asking your college financial aid officer, religious organizations you belong to, and/or any local community foundations within your area. Once you have identified a no interest loan opportunity, here are a few questions to consider:
1. Do you need the money quickly?
Do not expect to automatically receive the no interest student loan simply because you qualify. Some no interest student loan opportunities are similar to applying for a scholarship, they will require interviews and/or essays.
2. Does the loan require immediate repayment?
Unlike, most federal and private student loans, where repayment is deferred until graduation, some interest free loans will require the student to start making small repayments immediately.
3. Does the loan require a cosigner?
Unlike federal student loans, some no interest loans will automatically require a cosigner, regardless of your credit history.
4. Are you going into the Public Service Field?
The federal government offers a loan forgiveness program for qualified public service employees, charitable (or no interest) student loans do not qualify for this forgiveness program.
A no interest student loan is obviously a wonderful opportunity. Borrowing money for college without having to pay any interest will no doubt save you some cash. However, as with all types of college financial aid, you should educate yourself and ask questions to make certain you are making the best choice for your financial future. Listed below are some organizations offering interest free student loans to get you started:
Central Scholarship Bureau
Makes loans of up to $10,000 each year for no more than four years to meritorious students from Maryland whose families have adjusted gross incomes of less than $91,000.
Abe and Annie Seibel Foundation
Makes 800 loans of up to $6,000 annually to Texas residents attending a Texas college who have good grades and test scores.
The Scholarship Foundation of St. Louis
Makes about 630 interest free student loans annually of up to $5,000 a year for meritorious students who come from parts of Missouri and Illinois and whose families have EFCs of under $12,000.
Evalee C. Schwarz Charitable Trust for Education
Makes loans of up to $15,000 a year for students who will be attending an in-state school with expected family contributions of less than $4,000, high test scores and grades.
Hattie Strong Foundation
Makes about 125 new student loans annually of up to $5,000 for meritorious and needy fourth-year college students.
Bill Raskob Foundation
Makes about 100 interest free student loans annually, averaging $5,000 a year to U.S. citizens attending accredited American colleges who have finished their freshman year.