Money to pay for a college education can be hard to come by. Saving in this economy is a challenge. Scholarships are competitive. And student loans often won't provide you with enough money to cover both tuition and all the other associated costs.
But some community-based groups are seeking to fill the affordable college financing gap. As a recent MarketWatch article discussed, these local lending groups are playing an increasingly important role in getting many students to college.
There are wide differences between types of student loans. On one hand, federal loans typically offer reasonable rates and generous terms, including loan deferment and forbearance under certain conditions. Yet many people need more money than those federal loans can provide, so they turn to private lenders. Their loans can carry much higher rates, making longer repayment periods necessary and thus postponing the day students and their families can get them paid off.
The loans offered by these hundreds of community-based groups fall somewhere in between. Using locally generated donations, these groups put together funds that offer loans to graduating high school seniors from their local schools.
Typically, the interest rates are comparable to what federal loans charge and therefore much more attractive than the average private loan rate. A few community groups even give out interest-free loans.
But community-group loans carry their own challenges. You can't expect the same flexibility in repayment terms and periods as federal loans offer, and they typically require parents to co-sign. Some also require collateral, up to and including parents' homes. As a result, defaulting on these loans can cause much more serious problems.
Moreover, because funding is limited by the generosity of local donors, students can't expect to receive huge amounts. Especially in a tough economy, donations can be hard to come by. And the community groups are also suffering from low returns on their investments.
Find Out More
To find out if your child may be eligible for a community-based loan, talk to your child's high school guidance counselor or principal. They should be able to get you pointed in the right direction if there's funding available.
Community-based loans won't solve all your problems. But when every dollar counts, even small loans could make a big difference.
Amazon's Book Rental. Rent e-books as long as you need them (30 days minimum) and save up to 80% off the cover price. The best part about this service is that all your highlights and notes will still be available via their Cloud service even after you've returned your book. You can download books to just about any device, including the iPad, Kindle, Macs and PCs.
Rent-A-Text. Created by Follett Higher Education Group, students can save 50 percent on average by renting their books from Rent-a-Text. Not only can you rent straight from eFollett.com, but the site gives access to rentals from more than 900 college bookstores across the nation. Want to avoid shipping charges? They tell you where to pick books up, too.
Collegebookrenter.com. This site promises savings up to 85% off the cover price of textbooks. It claims to have the largest textbook inventory on the market and also allows you to sell or buy books new. CEO Chuck Jones says they aren't offering e-books at the moment but don't charge customers for shipping costs. And if you're really into highlighting the margins, Jones promises they're far more lenient in that regard.
Chegg.com.This site has a huge inventory of books for rent and it recently launched an e-book rental service as well. You can download books to your account and access them anytime on the Web. The only drawback is they're only available as streaming files, so you'll need an Internet connection to access them and they can't be downloaded.
Campusbookrentals.com. They give you a 15-day late return grace period and offer three options for rentals: 55 days (summer), 130 days (semester) and 85 days (quarter). Extra perk: They're cool with highlighting fanatics, too.
You can sell back your books on most sites, but Amazon is a great go-to site for anyone new to the game. Campusbooks.com has a great app to find the best buy-back price on your books. Stack up your text books with the ISBN codes all facing the same direction, then snap a photo with your smartphone.
Swap.com. The go-to site to swap everything from DVDs to expired Groupons, Swap.com is also great for trading textbooks. If you've got an older edition you know you won't get much cash back for, it might be a better idea to try to swap it for another title.
Edubookswap.com. This site is a bit different in that it charges a fee ($8.95) for swapping services. If you sign up for a five-swap plan, that gets knocked down to $7.99 per book. But the cool part is every book you post for sale accrues points toward your account, which can then be applied to a book purchase. The points for each book are based on fair market value of the book, age and demand.
Bookmooch.com. This is a true swap site, in that you trade books even-steven with other users and get points for every book you give away. For each book you give, you can get one back in return and you only pay the cost of shipping. You can also request books from other countries and choose to donate points to charities.