Where to find 0% student loans

NEW YORK (CNNMoney) -- If you have to borrow for college, why not do it at 0%?

Most students looking for funding for school don't realize that there are nearly two dozen foundations and state programs that will lend money without requiring a penny in interest.

Of course, there are nowhere near enough of these no-interest loans to go around. And they aren't always easy to apply for—many require essays and interviews.

But for those who do qualify, the time spent on applications "can really pay off," says Jessica Lee, 28, who is starting her career as a dentist in Colorado this fall. Lee spent dozens of hours filling out applications for such loans, and was rewarded when two charities fronted her a total of about $52,000 at 0% to fund dental school. That saved her at least $10,000 in interest, she figures.

Unfortunately, it can be tricky to track down these bargain student loans. So to help students find them, CNNmoney.com is posting the web's most complete list of organizations offering them in 2012 below. Students who don't qualify for these options might ask at their religious institutions as well as local chapters of Rotary Clubs; your college financial aid officers may also know of other sources.

One word of warning: Don't be so quick to turn up your nose at the more expensive federal options in favor of these choices. Student loan experts such as attorney Heather Jarvis say that in some cases, federal student loans—even the unsubsidized Staffords, which charge an APR of 7%—can be better deals, since they offer very flexible repayment options and can be eligible for forgiveness. You should also be aware that, unlike federal loans, many of the interest-free loans require cosigners and payments while you are in school.

(If your organization makes interest-free student loans and wishes to be included in this list, email kclark at moneymail.com)

Interest-Free Loans

Name Who qualifies Maximum annual loan Have to make payments while in school? # of loans expected in 2012-13
Massachusetts No-Interest Loan Residents of Massachusetts with need attending participating colleges $4,000 No 1,700
Military Officers Association of America (MOAA) Children of military personnel $5,500 No 1,700
Abe and Annie Seibel Foundation
(409) 770-5665
Residents of Texas with need and good grades $6,000 $50/month 900
Scholarship Foundation of St. Louis Residents of St. Louis with need $14,000 No 660
Jewish Free Loan Association (Southern California) Residents of Los Angeles with two cosigners $3,500 $75/month 650
Hebrew Free Loan Association of San Francisco Jewish students from Northern California (although a non-sectarian loan is being developed.) $6,000 Yes 250
Jewish Education Loan Fund Jewish students in the South with need and one cosigner Student's remaining need after all other aid. No 150
Hebrew Free Loan (of Detroit) Jewish students in Michigan with a cosigner $4,000 $50/year 112
Leo S. Rowe Pan American Fund Citizens of Latin American or Caribbean countries who have cosigners and will return to their homelands. $15,000 No 100
Evalee C. Schwarz Charitable Trust for Education Students who are eligible for a Pell grant, paying in-state tuition, and have excellent grades and test scores. (Law students excluded.) $15,000 No 83
Central Scholarship Bureau of Maryland Residents of Maryand with GPA 2.0+ and cosigner $10,000 No 75
Hebrew Free Loan Association of Cleveland Residents of Northeast Ohio with cosigner $2,500 $75/month 60
Bill Raskob Foundation U.S. citizens who have finished freshman year of college No maximum, but average is $2,000 No 50
Phoenix Jewish Free Loan Association Jewish residents of Arizona $5,000 At least $50/month 35
Milwaukee Jewish Free Loan Association Residents of Milwaukee with up to two cosigners $3,600 Yes 24
Student Education Loan Fund (S.E.L.F.) Residents of Livermore, CA $2,500 No 20
Rotary Club of Amesbury, MA Residents of of Amesbury, MA with parent cosigner $1,000 No 15
Rotary Club of Keene, NH Residents of Cheshire County who are upperclassmen $2,500 No 4
California no-interest loan (formerly known as the Weingart no-interest loan) Students at participating California colleges with need (For information, ask your college's financial aid office.) $4,000 No NA
Dallas Hebrew Free Loan Association Jewish students in Dallas area with 2.5+ GPA and two cosigners $4,000 $75/month NA
Scholarship Foundation of Santa Barbara Residents of Santa Barbara area with 2.0+ GPA and need $5,000 No NA
NOTE: Rates are accurate as of July 16, 2012, but subject to change. Interested students should check the websites for up-to-date information.
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