What Are Emergency Student Loans?

Emergency student loans are short-term student loans that are designed to help students cover things like tuition, rent and course textbooks. In the current financial climate, the students' ability to pay can change drastically. For example, a parent may get fired or suffer a pay cut. Compared to other student loans, emergency student loans offer less money and have shorter terms. However, they are easier to secure, they go into effect much quicker and they don't contain extra fees that are common in other student loans.

Understanding Emergency Student Loan

The key difference between emergency student loans and other student loans is that they can be taken out at any point during the course of the semester. The student can apply for an emergency loan before the semester begins, but in that case, he or she won't get it until the semester begins. The emergency student loans are issued by colleges using their own funds. Those funds are set aside ahead of time, but once they are spent, the colleges have no way of replenishing them until next semester. This means that if too many students apply for emergency student loans early on, there may not be enough money for those who apply later.

Applying for Emergency Student Loans

In most colleges, the students can only apply for one emergency student loan per semester. In order to qualify for the emergency loan, the student needs to be enrolled at the time of the application. To apply, the student will need to make an appointment with the college's financial aid office. He or she will need to explain the purpose of the loan and how much he or she needs to borrow. The college will not issue the loan unless a student can demonstrate urgent financial need. Some colleges require the students to provide supporting financial documentation. If the college discovers that the student lied about the reason for the loan during the application process, the student will be barred from taking out any more loans in the future.

Once the student's application is approved, the loan is issued very quickly. Depending on the college and the funds involved, it can be anywhere between two days and a week.

What Emergency Student Loans Offer

As mentioned in the introduction, the emergency student loans don't offer as much money as other types of student loans. UC Berkley, for example, limits it's emergency loans to $755 per student. The student does not pay interest or any other fees associated with other student loans. The terms of the loan are also shorter. Different colleges have different limits on how long the student has before he or she has to repay the loan. Generally speaking, it can be anywhere between 30 to 60 days, with most colleges trending towards the former. Once the repayment date arrives, the student must repay the loan in full.

In the past, colleges allowed student loans to use other student loans to cover the payments, but the recent changes in federal law made it illegal. As the result, student has to repay his or her emergency student loan out of his or her own pockets. If the student falls behind on the payments, he or she will charged a late fee. If the student doesn't repay they loan in full, he or she may have to pay additional fines. The financial aid office will place a hold on the student's account, prohibiting the student from registering for classes or getting any more financial aid until the loan is repaid. If the student does not repay his or her emergency loan by the end of the semester, they will no longer be eligible for emergency student loans.

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