Emergency Student Loan Options

Written by: Kristyn Pilgrim
Updated: 8/12/20

If you’re experiencing an emergency, the last thing you want to worry about is coming up with tuition money you thought was already covered. Luckily, colleges can work with students facing unexpected hardships and offer emergency student loan options.

In this guide, we’ll walk you through what emergency student loans are, explain the types of emergencies covered by these loans, and help you decide which steps to take if you need financial aid due to an unexpected occurrence.

What Are Emergency Student Loans?

Emergency student loans are usually short-term, interest-free loans that are often granted to students who need quick help to afford their bills, expenses, or housing costs. Schools often have emergency funding set aside for students to help keep them enrolled during a tragedy or unexpected event. 

In addition to these regular funds, schools now have more funding available for emergencies. Recently, the Department of Education granted emergency funding to all schools that participate in federal student aid, allowing them to offer emergency grants to students in need of additional aid to cover expenses like housing, food, and course materials during the coronavirus pandemic.

When Are Emergency Student Loans Granted?

Not everybody qualifies for an emergency student loan. Although your school may have specific rules regarding how to receive emergency financing, you typically must show urgent financial need to receive this type of loan.

Some reasons emergency aid might be granted include the loss of a parent, dismissal from a job, a natural disaster, a crime/theft, or another sudden financial loss. 

How Much Can I Receive With an Emergency Loan?

Emergency loans are designed to help students stay in school without worrying about bills or expenses. They’re designed to help with everyday expenses like transportation, bills, or housing as a temporary measure to help students get back on track while in school. They’re not meant to fund your tuition.

Emergency student loans typically cover amounts up to $1,000 and have short repayment terms (the full amount is due in 30 to 60 days). Actual amounts vary from school to school.

Emergency Student Loans vs. Short-Term Loans

Emergency student loans are similar to short-term loans since they are typically repaid a few months after receiving financing. However, there are some major differences between emergency student loans and traditional short-term loans.

The primary difference to be aware of is that short-term loans carry an interest rate, while most emergency student loans do not. Short-term loans often have higher loan limits than emergency loans, ranging from $5,000 to $300,000.

If you need to borrow money during an emergency to pay for more expensive costs, like your school tuition, for instance, your school might offer a short-term student loan. These loans typically cover larger purchases, and, unlike traditional loans, many schools do not charge interest or charge lower interest rates.

How to Request an Emergency Student Loan

If you find yourself in a rough financial situation and feel you won’t be able to continue your schoolwork and manage your finances, you can look into an emergency student loan. To do so, you’ll want to reach out to your school’s financial aid or bursar’s office to find out the next steps.

Every school handles the emergency student loan process differently, but once they’ve evaluated your emergency, you’ll need to qualify for this type of financing with the following:

  • Active enrollment status at your college
  • No current or past due short-term loans
  • No emergency loan history for that academic semester
  • No registration holds on your account

Some schools may also require a certain GPA to grant you emergency financing.

Tips to Consider When Requesting an Emergency Loan

While requesting a loan from your school is a fairly straightforward process that can often be handled quickly, there are some factors you’ll want to consider before borrowing any emergency funding.

1. How Much Do I Really Need?

It can be easy to borrow a little more than you actually need. However, since emergency student loans have short terms, you’ll need to remember that you’ll be repaying this loan within the next 30 to 60 days. If you want to make sure it’s easier to repay your loan, determine how much money you need to make ends meet, and only ask for this amount.

2. Find Out If There Are Any Fees.

While many short-term emergency student loans do not charge interest, some may have origination fees or other costs associated with taking out the loan. Be sure to ask your financial aid office about these fees so that you can decide if the emergency student loan is still your best bet.

3. Do Your Research.

Emergency student loans can help bridge a gap between losing a job and starting a new one, but if you’re not sure where your next paycheck is coming from or if you want to find a different way to finance your college expenses, do your research. Talk to your financial aid office to see if there are alternative options available or any jobs on campus you can apply for.

Alternative Solutions for Emergency Funds

Emergency student loans aren’t your only option when it comes to looking for funds. If you find yourself in an unexpected situation, be sure to review these alternative funding options before taking out an emergency student loan.

1. Grants and Scholarships

Whenever an emergency arises, it’s best to discuss what’s going on with your financial aid adviser to find out if the school has any mechanisms to help. For example, the school may be able to find a grant or scholarship you can apply for to help with tuition costs for the rest of the semester. Even if you didn’t qualify for a grant or scholarship earlier in the year, your new financial need might change your eligibility.

2. Financial Aid

Depending on the time of year that your emergency arises, you might be able to fill out the Free Application for Federal Student Aid (FAFSA) or amend your FAFSA based on your new financial information. Doing so could award you with federal grants, loans, or work-study opportunities. The cutoff for filing your FAFSA is the last day of June; however, some schools might have earlier requirements. Your financial aid office can let you know your school’s specific deadline.

If you’ve already submitted a FAFSA, and it’s too late in the year to amend your information, you might be able to appeal the financial aid award your school offered. Talk to your financial aid department about how the appeals process works at your school.

3. Private Loans

If you need more money than your school’s emergency student loan can offer, or if you need more favorable loan terms, you can apply for a private student loan through a bank or credit union. You might need a co-signer if you don’t have established credit. If you’re under the age of 18, you’ll need a co-signer, as well. 

4. School Support

Lastly, if you only need a small amount of money to help with meal and educational expenses, talk to your school to see if they provide any assistance programs. Not all schools can find last-minute money, but many can offer vouchers or discounts on cafeteria meals, books, and other gear in the school store. Checking to see if you’re eligible for any support could save you from taking out an emergency student loan.

Find Money for Your Education With CollegeFinance.com

Funding college can be a challenge for many students – but this situation can become more dire when an emergency arises. Emergency student loans allow students to quickly gain access to funds so that they can continue with their college education.

Emergency student loans aren’t for everyone, though. Whether you need more money, weren’t approved for certain funding, or are looking for a better way to fund your postsecondary education, CollegeFinance.com has the resources you need to find the best solution for your situation. 

We can also help you find money in unexpected ways, like helping you find grants to fund your housing during college. Check out all of our resources.