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If you are trying to figure out how you can afford to attend university, you probably are feeling pretty lost and intimidated right now. True, you could use student loans, but student loans have notoriously unfair terms, and defaulting on them can be frightening. Collections fees and interest on student loans often add up to more than the original loan. The government is looking into new and alternative sources of student funding, but it is going to be a while before they’ve got your back. So in the meantime, what can you do to find alternative means to finance your education?

Consider a grant or scholarship

Scholarships and grants are still worth their weight in gold if you can get them. Applying can be pretty overwhelming though. Even though there are hundreds of scholarships you can try for, many of them also have hundreds of candidates. What is the best way around this problem? Avoid applying for major nationwide scholarships unless you have a really good reason to believe you will win. Instead, stick to smaller local programs and grants which are specific to your discipline. The more obscure the opportunity, the more likely you are to win.

Are grants and scholarships new? No—but they are still an alternative to FAFSA loans!

Try to get a personal loan instead of a traditional student loan

There is no rule that says you have to apply for a student loan to finance your education. Student loans are traditionally easy to qualify for, especially if you have no credit or bad credit. If you are just starting out in life, you may be in a situation where it is hard to qualify for a personal loan. But that does not mean it is impossible. And if you are an older student, you may already have great credit. So why confine yourself to a student loan?

You can use a personal loan on anything—that is what makes it a personal loan. So that means you can put it toward tuition, room and board, books, supplies, anything you need. FAFSA has very stringent rules about how you use your student loan money. In fact, typically it never passes directly through your hands at all.

So that is one reason to consider a personal loan. The other reason is that you can shop for the best option. You can deal with a lender you are comfortable with and have had good experiences with. You can carefully select a loan which has reasonable and fair terms. You can qualify for a lower interest rate if your credit is good. Compare the top online personal loan companies.

Go with peer-to-peer lending instead

Like the idea of shopping around for a loan, but don’t qualify for a traditional personal loan? One thing you can do is skip dealing with the banks, and instead turn to the internet and search for a peer-to-peer lender.

Peer-to-peer (P2P) lenders take many forms. Sometimes they actually are local credit unions and other institutions that want to help out. Other times they may be individuals who have extra money and want to make a difference. Some institutions and individuals are more likely to consider lending to someone with no credit or bad credit. You can often enjoy a more personal relationship with a P2P lender. If you hit a hurdle in the future, they may be more lenient than a traditional bank. They may also offer you flexible terms like repayment deferment.


These days it seems like crowdfunding garners surprisingly effective results, even for people who may not feel like they have a huge network of support. Of course, the more people you know, the better. But you would be surprised at the number of random donations from strangers which find their way through crowdfunding channels to those in need.

Stay away from Kickstarter for this—which is meant as a platform for entrepreneurs, not as a personal lending site. Use sites like GoFundMe instead.

University scholarships

Many new students actually do not realize that universities offer a wide range of scholarships which are only open to particular students who have been accepted. University scholarships are exciting because you are up against a limited candidate pool. Some are given based on merit, while others may be offered to minorities or students who are enrolling in a particular field of study.

How can you apply for these scholarships? In some cases, you need to apply for each one individually. In other cases, you can apply for a whole pool of scholarships with a single application. Your school’s website should have a searchable list which will tell you the qualification requirements and deadlines on each. Other universities will enter you automatically for some or all scholarship opportunities at the start of each year.

Finding money for school isn’t easy, but there are a lot more opportunities out there than you may realize. If you think outside the box, you may find there are abundant alternatives to FAFSA.

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