Continuing Education Loans Explained

Continuing education loans can help pay for class tuition beyond the typical undergraduate course load. Typically, lenders offer options to full-time students pursuing an undergraduate degree and may extend similar loans to graduate students. However, there are a host of programs that do not fit into either of these categories. Examples include teaching certificates, nursing classes, computer classes and trade schools. If you are pursuing continuing education but are not enrolled in a full-time program, you will have to consider different options.

Federal Continuing Education Loans

There are not traditional federal loan options for continuing education for part-time students. Most federal loans, such as Stafford Loans, Perkins Loans and PLUS Loans, are distributed only to full-time students who have a term-by-term education cost. Unfortunately, this means students simply pursuing a class in a new computer program or operating system will not be able to capitalize on the flexibility and low rates of federal loans. However, if you do intend on pursuing a program like teaching or nursing, you may consider federal programs that encourage professionals to enter these industries. For example, the Teach for America program is federally funded and can provide you with a stipend and discounts for attaining your certification in teaching.

Private Continuing Education Loans

Private lenders are much more flexible with loans for continuing education. A good place to start is with a lender you already have a relationship with, such as your bank or mortgage company. Ask about small education loan options to receive basic information on payment terms and loan limits. You may also want to inquire with the financial office of the school you will be attending. Even online colleges and trade schools have financial offices that can offer assistance in connecting you with a good lender. Be wary of any lender that is owned and operated by the same school providing your education, however, as this can be a sign of an unethical business.

Personal Loans

You do not have to use a specific education loan to pay the cost of a continuing education program. For example, tuition to a single class in a foreign language or skill may be less than $1,000. You have the option of taking a small personal loan or using a credit card. A personal loan will be cheaper when secured with collateral. Consider a simply auto title loan or home equity loan to keep the rates low and meet your education costs.

Loans against Retirement Funds

You may consider taking a loan against your 401k or IRA in order to pay the cost of continuing education. Directly withdrawing these funds can result in a very high tax penalty if you are younger than 59 1/2. However, your company may offer a loan program that can directly assist in purchasing a limited amount of assets: one of those assets is typically a house, and the other asset is usually a continuing education degree. Check your company's policy to see if you can get a loan from your 401k in order to help pay for schooling.

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