College students know all too well what empty pockets feel like.
An unbudgeted rent deposit, surprise school fee or emergency car
repair can flatten a wallet faster than a floating keg can kill a
frat party. But there is a way to get hold of some quick cash:
short-term emergency student loans from the college.
Details vary from campus to campus (see
for some examples), but typically, loans of up to $1,000 are
available with little or no interest. You can get them within a day
or so of applying, but you also have to repay them within a few
months. Still, for a temporary cash crunch, they may be an
attractive alternative to running up credit card debt, taking a
cash advance, pawning grandma's necklace or humbly asking parents
to fork over more money.
No organization keeps statistics on the number of colleges that
offer short-term or emergency loans. But many colleges include
details about them on their financial aid Web pages. The programs
seem to be most prevalent at public colleges and universities.
"If it's available at your school, it's an ace up your sleeve if
you need it," says Kalman A. Chany, author of "Paying for College
Without Going Broke." He says an emergency loan can be helpful if,
for instance, you find yourself short for the housing bill or a
relative dies and you need a plane ticket home.
Not an emergency beer fund
The loans are meant to be a financial bridge for urgent needs. For
example, Appalachian State University in Boone, N.C., offers
one-month, interest-free loans capped at $275, with a 1 percent fee
(maximum: $2.75). The loans have a "nearly 100 percent approval
rate," according to Donna Jones, a business officer at the
Most applications come at the very beginning or end of the
semester, and the most common recipients are students who struggle
with rent while waiting for financial aid, says Jones. Others have
unforeseen medical expenses or need car repairs. Jones says the
college won't extend loans to cover court costs or routine
College officials say they're actually making fewer short-term
loans than they were a decade or two ago. That's because changes in
the system have sped up disbursements of traditional financial aid,
meaning that fewer students are caught in a financial bind while
waiting for their money to arrive.
Jones recalls an afternoon 20 years ago when 150 Appalachian
State students were lined up for emergency loan checks. Today, the
college typically makes fewer than 10 short-term loans per
Several factors are behind the dramatic drop. Students apply a
lot less often than they used to because they have more options for
traditional financial aid, says Jones. And the university has
tightened lending requirements as it tries to ensure that
students have a way to repay.
The University of Nebraska has seen a big drop in applications,
too. In the 1991-92 school year, the college awarded $1.4 million
in short-term loans. Last year, it gave out just $123,000 worth of
90-day loans (capped at $500, or $1,000 with a
), says Craig Munier, director of the office of scholarships and
financial aid at the school.
Munier says the program was created years ago to help students
who had expenses while waiting for their financial aid checks. But
with that system streamlined, short-term loans are less vital
"It seems that maybe its necessity is significantly less than it
once was," he says. "But when you have a car that's not running and
you don't have a way to get to class, getting $500 to get your car
repaired is very helpful."
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