Best Student Loans in Arkansas of 2024

The cost of higher education in Arkansas is on a steady incline, transforming the dream of a degree into a financial challenge for many. But don’t be discouraged. You can navigate this financial landscape smoothly with the proper knowledge and resources.

MoneyGeek’s analysis found that the best student loans in Arkansas are from PNC. Borrowers looking for the lowest interest rates may find Earnest as the best option, while students with bad credit may fare best with Funding U. International students can get the best deal from Ascent, whereas students who need a co-signer should consider College Ave. Ultimately, the best lender for you will depend on your particular needs and circumstances.

Student loans serve as a financial bridge, allowing students to cover the costs of their post-secondary education, including tuition, books, supplies and living expenses.

Obtaining a student loan involves borrowing money from a lender, which you then use to pay for your college expenses. This borrowed amount, known as the principal, accrues interest over time. After graduation or when you drop below half-time enrollment, loan repayment begins. Note that you're responsible for repaying the principal amount and the accrued interest.

There are two primary types of student loans:

• Federal student loans: The federal government funds federal student loans. These loans often come with lower interest rates and more flexible repayment options compared to private loans. The government determines your eligibility by the information provided on the Free Application for Federal Student Aid (FAFSA).

• Private student loans: Private entities such as banks, credit unions and other financial institutions fund these loans. Although private student loans often have higher interest rates and less flexible repayment options, they can be a good option for those who have exhausted all other forms of financial aid.

Understanding the differences between federal and private student loans is critical to deciding which type of loan best suits your financial needs and circumstances.

Unlike federal student loans, private student loans are not based on need and often require a credit check. They can be a solid option for students attending a part-time program or a non-traditional school that doesn't qualify for federal aid.

With private loans, you can have higher loan limits, which can be beneficial if you pursue degrees in high-cost fields, such as medicine or law. However, expect higher interest rates and fewer repayment options. You may also need a co-signer to get approved or receive a lower interest rate.

As a form of financial aid the U.S. government provides, federal student loans help students cover the cost of higher education. They often come with benefits that make them a more attractive option for many students, including:

Federal student loans are a common form of financial aid for students in Arkansas, with the following options available:

• Direct Subsidized Loans: These loans are available to undergraduate students with financial need. The government pays the interest on Direct Subsidized Loans while the student is in an in-school, grace or deferment period.

• Direct Unsubsidized Loans: With Direct Unsubsidized Loans, you don't need to demonstrate financial need to be eligible. You only need to be an undergraduate, a graduate or a professional student. Note that you'll be responsible for paying the interest during all periods.

• Direct PLUS Loans: These loans are available to graduate or professional students and parents of dependent undergraduate students. A credit check is required to qualify for this loan, which means borrowers with bad credit must meet additional requirements to be eligible.

• Direct Consolidation Loans: This type of loan lets you combine all your eligible federal student loans into a single loan with a single loan servicer. This helps simplify repayment if you are currently making separate loan payments to different loan servicers.

Depending on your educational and financial situation, you may select one or more loan types to fund your academic journey.

Student loan forgiveness is a program that cancels a portion or all of your federal student loan balance. If your loans are forgiven, you are no longer obligated to make payments on the forgiven amount.

In Arkansas, there are several student loan forgiveness programs available, particularly for teachers and public service workers:

The Arkansas State Teacher Education Program provides loan repayment assistance to teachers in subjects or geographic areas with a critical shortage. Eligible teachers can receive up to $3,000 per year for a maximum of three years.

To qualify for this program, you must meet these requirements:

• Be an Arkansas resident.
• Have a federal student loan.
• Be a licensed teacher in a public school district in Arkansas.
• Teach in a subject or area with a critical shortage.

You can apply by submitting an application to the Arkansas Department of Higher Education, which administers the program.

The Public Service Loan Forgiveness (PSLF) Program is a federal program that cancels the remaining student loan debt after 120 qualifying payments while working in public service.

In Arkansas, qualifying employers include government organizations at any level, not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code, and other types of not-for-profit organizations that provide certain types of qualifying public services.

To be eligible for this program, you must meet the following criteria:

• Work full-time for a qualifying employer.
• Have Direct Loans (or consolidate other federal student loans into a Direct Loan).
• Repay your loans on an income-driven repayment plan.
• Make 120 qualifying payments.

To apply, you must submit the PSLF form to the U.S. Department of Education after making 120 qualifying payments. You should also submit this form annually or whenever you change employers to ensure you're on track to receive forgiveness.

Effectively managing student loans is an important part of maintaining financial health during and after your college years. Here are some essential tips to help you navigate this process:

When managed correctly, student loans can be a tool for building a robust credit history. This is because your payment history is vital in determining your credit score. Consistently making your student loan payments on time each month can showcase your reliability and responsible debt management to lenders, which can improve your credit score over time.

On the flip side, late or missed payments can negatively impact your credit score. These payment mishaps are reported to the credit bureaus and can linger on your credit report for up to seven years. As a result, your credit score may drop, and you may experience difficulties when applying for other types of credit, such as credit cards or auto loans.

If you default on your student loan, you may encounter repercussions. These consequences may include a substantial decline in your credit score or wage garnishment, a process that deducts money directly from your paycheck to repay the loan.

Navigating the world of student loans in Arkansas can be complex, and you may have several questions about the process. We addressed some frequently asked questions to help you understand student loans in Arkansas better.