Getting a Student Loan to Pay for College: How to Apply and Other Considerations

ByG. Dautovic
June 13, 2022

Getting a higher education is more expensive than ever. Tuition fees have more than doubled over the last two decades. If your parents haven’t stashed away some cash in a savings account and you don’t qualify for a scholarship, you’ll likely have to take out student loans. 

In this blog post, we'll tell you how to get a student loan, go over different types of loans for college, and cover the most important considerations.

How to Get Student Loans

If you decide to borrow money to finance your college education, you’ll have a choice between federal and private student loans. Federal student loans are funded by the US Department of Education. Private student loans are available through banks, credit unions, and other financial institutions. 

Student loans through the federal government come with a few perks, such as low, fixed interest rates, forgiveness programs, and generous deferment options. But if you're a graduate student or a parent trying to bankroll your child’s college education, private student loans are worth considering.

Federal Student Loans

If you are wondering how to get federal student loans, you’ll be glad to hear that the process is relatively straightforward. To apply for a federal student loan, you will need to fill out and submit the Free Application for Federal Student Aid or FAFSA. The FAFSA is a form that collects information about your financial situation and other relevant matters. This information is used to determine how much of the college tuition can be covered by the applicant. You can apply for a student loan online for free. Simply visit the Federal Student Aid website and provide the necessary information.

Info Requirements for the Federal Student Loan Application

To apply for student loans, you will need to provide your Social Security number, date of birth, and the name and address of the college you plan to attend. You will also need to provide information about your parents' income and assets. If you are considered a dependent, your parent's information is required. If you are considered an independent student, you will only need to provide your own information. 

Once you have submitted the FAFSA, the government will determine how much money you are eligible to receive in federal student loans. 

The FAFSA application is updated every year with student loan requirements. You will need to submit a new FAFSA form for each academic year that you wish to receive financial aid. 

Comparing options

The information you provide in your FAFSA application is used to calculate your Expected Family Contribution or EFC. This is the amount of money the government expects you to contribute to your college tuition. 

In addition to getting a loan for college, you can reduce your costs through aid packages offered by institutions where you apply. Colleges determine how much aid applicants need by subtracting the EFC from the tuition and other major expenses. Some institutions also offer grants which are typically reserved for students with specific financial needs.

When getting loans for college, it’s important to weigh your options carefully. There are two types of loans available from the federal government: subsidized loans and unsubsidized loans.

Direct subsidized loans are need-based loans. The Department of Education pays the interest on subsidized student loans while you're in school and during the six-month grace period. You don't have to begin repaying your subsidized loan until after the grace period. 

Direct unsubsidized loans are not need-based loans. You are responsible for the interest from the time the loan is disbursed until it is paid in full. The interest on unsubsidized student loans can be capitalized (added to the principal amount of your loan) when you enter repayment. 

How Much Can You Borrow? 

The amount of money you can take out with a student loan from the government depends on a range of factors, such as whether you're a dependent or independent student. Of course, there are limits on how much you can borrow each year and in total.

If you're a dependent student, you can borrow up to $5,500 for your first year of study. Of that amount, a maximum of $3,500 can be subsidized.

If you need more money, you can get it through the federal Direct PLUS Loan, which is lent to parents who are paying for their children’s education. They are unsubsidized loans, meaning that their interest accrues immediately. The interest rate for this loan is 7.54% for the 2022-2023 school year. 

To get a PLUS loan, the parent will need to fill out and submit the FAFSA form. For those who don’t know where to get this type of student loan, the Federal Student Aid website provides all information. 

PLUS loans require a credit check, but the government is not that strict when it comes to negative items on the applicant’s credit history. 

Be sure to submit your FAFSA form on time so you do not miss out on any opportunities for financial aid.  Still, if you are not eligible for a federal student loan, a private student loan is another option. 

How to Get a Private Student Loan 

Private loans can be used to cover different expenses, including tuition fees, and usually have higher interest rates than federal loans. 

To get a private loan, you will need to fill out and submit a loan application. If you don’t have a decent credit score, you’ll need a co-signer who has one. 

The student's credit history plays a role in determining whether or not they qualify for a personal student loan as well as the interest rate. Getting a student loan with bad credit is still possible because there are private lenders that provide student loans for borrowers with a less-than-perfect credit score.

The main downside of private student loans is that they are more expensive than federal student loans. They come with higher interest rates that are variable. 

When you compare private student loans, be sure to look at the interest rate, fees, and repayment options. 

What Should You Consider When Taking Out a Student Loan?  

The institution you choose for your education has a big impact on how much money you need to borrow. Obviously, attending a more expensive school will require you to take out a bigger amount. 

Choose the school carefully 

Although you shouldn't choose a college based on costs, you still need to think about the aid packages and the loan you can get. If you’re heavily indebted when you graduate, your health and professional life can suffer. Before taking out loans for college, you should have some idea of what you want to do in life and remember that careers with good entry-level salaries can help you pay off your debt faster. 

Borrow the amount that you need

It can be tempting to take out the maximum amount that you're eligible for. But remember, you'll have to pay all of that money back with interest. So, only borrow what you need and try to find other ways to reduce the cost of your education. You can also apply for financial aid that helps with tuition fees and covers accommodation. 

What Are the Advantages of Federal Loans Over Private Loans?

The best way to get student loans is through government programs. Federal loans offer plenty of advantages, including flexible payment plans and lower interest rates than those you get with private loans. Also, if you can't find a job after graduation or you encounter other financial difficulties, you can defer your federal student loan payments. 

What's more, if you work in certain public service jobs, you might be eligible for student loan forgiveness. This means that after making a certain number of payments, the government will forgive the remaining balance on your loan. 

If you’re trying to figure out how to apply for student loans without a credit score, remember that federal loans don't require a good credit score, unlike private ones. So, if you don't have a good credit score or any credit history at all, you can still qualify for federal student loans. 

In short, federal student aid offers more benefits and protections than private loans. However, this doesn't mean that private loans are bad. They can be a good option if you need to supplement your federal loans. Just make sure to do your research and compare different lenders before applying for a private student loan.

Bottom line

Knowing how to qualify for student loans is an important part of planning for college, especially if you don’t qualify for grants and scholarships. The first step is to file FAFSA and to get in touch with your financial aid office. After that, you’ll want to start researching lenders and comparing rates. Lastly, once you have decided on a loan, make sure you understand the repayment process.

FAQ

How do you qualify for a student loan?

+

To get student loans, the first thing you need to do is file the FAFSA application form. After getting offers from the schools you applied to, you need to choose between subsidized and unsubsidized loans.

What are the 4 types of student loans?

+

The four most common types of student loans are direct subsidized and direct unsubsidized loans, PLUS loans, and consolidation loans. 

Is it hard to get student loans?

+

No, federal student loans are not hard to get. The application process is straightforward. Our article tells you how to get a student loan and the different options available. 

Can student loans be forgiven?

+

Yes, student loans can be forgiven in certain cases. Federal student loans come with loan forgiveness programs.  

About author

I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

More from blog


Leave your comment

Your email address will not be published.


There are no comments yet