Bad credit usually means bad news for students seeking private school loans. Normally, banks and credit unions look for borrowers with a good credit score when they have money for loans available. Bad loans are the cornerstone of the economic downfall the world is experiencing.

Today, some private lenders offer school loans to students with poor credit. However, students with poor credit accepting school loans results in paying high interest rates. A cosigner with good credit is a requisite. The reality is students with poor credit can receive school loans, but beware!

Private school loans for students with poor credit often lack a fixed interest rate. Rates will increase over time thereby increasing the bottom line on school loans. The total cost of the pay back far exceeds the money received. For students with poor credit there are better alternatives.

Students with poor credit can apply for government school loans. Count yourself as eligible until you receive official notice you are not eligible. Parents’ poor credit does not disqualify students from eligibility for federal student loans.

The first step toward securing a federal student loan is submitting a Free Application for Federal Student Aid (FAFSA) online at www.fafsa.ed.gov. This application puts into motion the process for obtaining Federal Stafford student loans, Perkins school loans and other student loans for all college levels.

Another financial aid source is tuition reimbursement from students’ employers, usually up to a $5000 allowance, when they agree to continue working for at least two years after graduation.