Learning how to get a student loan can be overwhelming if you haven’t done it before. You’ll need to research different types of loans, review eligibility requirements, and determine how much to borrow. From there, you’ll submit an application and await loan disbursal.
Here’s how each step of the process works, so you confidently know how to get a federal or private student loan.
- Research loan types
- Review your eligibility
- Determine how much you need
- Submit an application
- Finalize loan and await disbursement
- What to consider before you borrow
1. Research different loan types
Before you worry about how to get a student loan, it’s important to understand the different types of loans you might qualify for. There are federal student loans, which are offered through the Department of Education, and private student loans, which are issued by private organizations like banks, credit unions, and online lenders.
For many borrowers, federal student loans can offer lower rates. Plus, they come with extra borrower protections, such as income-driven repayment plans, forgiveness opportunities, and more lenient hardship programs.
Within the category of federal student debt, there are four types of loans that borrowers may consider:
- Direct Subsidized Loans: These loans are available to undergraduate students who have demonstrated a financial need. The government pays the accrued interest when you’re not in active repayment.
- Direct Unsubsidized Loans: Open to both undergraduates as well as graduate and professional students, these loans are not based on financial need.
- Direct PLUS Loans: This funding is available to graduate and professional students, in addition to parents of dependent undergraduate students. This is the only type of federal loan that requires a credit check, though borrowers who don’t meet credit standards may still qualify after taking additional steps.
- Direct Consolidation Loans: These loans allow borrowers to combine existing federal debt into one new loan with a single servicer.
2. Review your eligibility
Next, you’ll need to determine if you qualify for student loans. Criteria vary depending on whether you’re applying for federal vs. private debt.
For federal student loans, applicants generally must:
- Be a U.S. citizen or eligible noncitizen
- Have a valid Social Security number
- Be accepted or enrolled at least half time in an eligible degree or certificate program
- Maintain satisfactory academic progress, as determined by your school
- Have a high school diploma or its equivalent
- Demonstrate financial need (only applies for certain types of federal funding)
Meanwhile, these are the requirements that generally apply for private student loans:
- Be a U.S. citizen or eligible noncitizen
- Be enrolled in an eligible degree or certificate program, often at least half time
- Be at least the age of majority in your state (typically 18 years old)
- Have a high school diploma or its equivalent
- Have a good credit score, generally above 670
- Meet income and debt-to-income requirements
If you can’t qualify for a private loan on your own, adding a cosigner to your application can help.
3. Determine how much you need
You’ll also need to figure out how much funding you need to pay for your education. Generally, you should only borrow the minimum amount needed to cover tuition, fees, and necessities — even if you qualify to borrow more.
“[Students] should consider not only what they need to borrow to cover college expenses, but what they can afford to repay once they’re out of school,” said Jill Desjean, senior policy analyst at the National Association of Student Financial Aid Administrators.
The Department of Education’s College Scorecard database offers information on median earnings by major for each college that offers federal student aid — this can help estimate your future earning potential.
Also make sure to factor in any scholarships or grants that you receive, as this can help reduce what you borrow. “Students should be certain to take advantage of any and all grant aid sources before borrowing student loans,” Desjean said.
Additionally, you may find that your borrowing capacity is capped by loan limits. Federal limits vary depending on your year in school and whether you’re a dependent or independent borrower, but generally range from $5,500 to $12,500 per year for undergraduate students.
Private debt often has higher limits. “Private loans are generally only limited by the cost of attendance at the school the student attends, but limits vary by lender,” said Desjean.
4. Submit an application
Once you’ve done the necessary research, it’s time to actually submit your student loan application. The exact process varies by loan type.
How to get a federal student loan
To apply for federal student aid, submit the Free Application for Federal Student Aid (FAFSA) form annually.
To do so, create a Federal Student Aid ID before starting the application at FAFSA.gov. You must provide a range of information, including detailed personal and financial data. If you’re a dependent student (most undergraduates are), a parent must also submit their own information.
Don’t wait too long to start this process — “students should complete the FAFSA as early as possible,” suggested Desjean, since some aid is awarded on a first-come, first-served basis. The newest FAFSA is typically released on Oct. 1 annually.
Based on the information you provide in your FAFSA, your school will outline your financial aid offer, which can include federal student loans, grants, and work-study opportunities.
How to get a private student loan
If you’re interested in private student loans, start by researching and comparing lenders. Once you’ve determined which ones could offer you the best deal, you can fill out an application.
You’ll generally need to provide your contact and personal information, as well as details about the school you’re attending, your anticipated graduation date, the cost of attendance, and your requested loan amount. You might also review a general disclosure document, which will provide examples of sample repayment plans and loan interest rates.
The approval process often entails a hard credit check, which can temporarily ding your credit score. Additionally, lenders will review the other information you’ve provided to determine if you’re eligible.
Decisions for private student loans often arrive fairly quickly. Some lenders may offer a same-day decision, while others will take several days to get back to you.
5. Finalize loan and await disbursement
For federal student loans, you’ll let your school know which aid you’d like to accept and how much you’d like to borrow. If it’s your first time getting a federal loan, you’ll also complete entrance counseling, which goes over the rules and conditions of the loans, before signing a Master Promissory Note to accept the terms.
When borrowing from a private lender, you’ll also need to review the terms of your loan and sign the final paperwork. From there, you’ll wait for your school to certify your loan, which typically takes a minimum of seven to 10 days; if any details change during that process, you may need to sign a new disclosure.
Money from either private or federal loans is typically sent directly to your school. The financial aid office will apply the funds to your outstanding fees before any leftover cash is sent to you.
What to consider before you borrow
Student loans make it possible for many students to afford a higher education, but you’ll have to repay that money someday. Consider other funding opportunities before turning to loans, and come up with a plan for future payment.
Keep the following suggestions in mind before you borrow:
- Exhaust all grants and scholarships first, as these typically don’t need to be repaid.
- Look beyond your college for private scholarship opportunities.
- Consider your future earning potential when determining how much you can safely borrow.
- Think about tapping into savings to help cover college costs, rather than relying entirely on loans.
- Consider making interest-only loan payments while you’re in school to minimize costs down the road.