How to Get a Student Loan

Student borrowers can get federal student loans and private student loans, but start with federal loans.
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Updated · 2 min read
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Written by Anna Helhoski
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Nerdy takeaways
  • Start with federal student loans before choosing a private loan.

  • Complete the FAFSA to learn your financial aid eligibility.

  • Parents and graduate students are eligible for select federal and private student loans.

Most students — 42.2 million as of the third quarter of 2024 — borrow money to pay for college. If you're one, you have two types of student loans to choose from: federal or private.

If you're an undergraduate, always start with federal loans. They don't require a credit history or a co-signer, and they offer more generous protections for borrowers, such as income-driven repayment and loan forgiveness, than private student loans offer.

Before you borrow, think ahead to how you’ll repay the debt. Use a student loan calculator to estimate the monthly payments you’ll be making every month for 10 years or longer. Borrow only what you need, and don’t take on an amount or interest rate you can’t expect to handle right after graduation.

Here's how you can get federal and private student loans.

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How to get a federal student loan

It’s best to start with federal student loans before applying for private student loans.

1. Submit the FAFSA

Submit a Free Application for Federal Student Aid, or FAFSA, to find out how much financial aid you may qualify for that won’t have to be repaid. This may include grants, scholarships and work-study.

It takes about 30 minutes to complete the FAFSA. Each school you apply to will use the FAFSA to determine your financial aid; the gap between aid and cost of attendance is what you have to cover.

2. Borrow subsidized loans before unsubsidized

The FAFSA serves as your application for federal student loans as well. There are two types of federal loans: subsidized and unsubsidized.

Subsidized federal loans go to undergraduate students with a financial need. The subsidy covers the interest on the loan while you’re in school. Unsubsidized federal loans aren’t based on need, and interest starts to accrue immediately.

3. Review and accept financial aid offers

You’ll be notified of what you can borrow in the financial aid award letter from any school that accepts you. An award letter will include the financial aid types and amounts you are eligible for, like grants and subsidized and unsubsidized loans. An award letter will also include the cost of attendance, which is an estimate of the tuition, fees, and room and board costs for one year of school.

Once you understand the awards being offered from institutions, you can compare costs and financial aid packages from each to reach a final decision on which offer to accept.

How to get a private student loan

Consider private student loans to cover any remaining costs after grants, scholarships, work-study and federal loans. They're a viable option if you have good credit or a co-signer who does.

1. Find a lender

Banks, credit unions, state-based agencies and online lenders all offer private student loans. Shop around with multiple lenders, weighing repayment flexibility and forbearance options as well as the interest rates offered.

2. Know the requirements

Most private lenders require borrowers to have good credit (a credit score above 689) and an income that can support loan payments while meeting other debts (in other words, a low debt-to-income ratio). If you don't meet those qualifications, you'll need a co-signer who does.

If you don't have a co-signer, a few private lenders offer loans for independent students and consider academic performance and earning potential, but you’ll pay more.

3. Compare lenders before applying for a loan

Research different lenders and compare their interest rates, repayment terms and consequences for defaulting on a loan. While federal undergraduate student loans currently have a fixed interest rate of 6.53%, private student loans may have variable interest rates that are much higher.

Student loans for parents and graduates

Parents and graduate students are eligible for certain federal and private student loans.

How parents can get student loans

Parents looking for loans to pay for their child’s education have federal and private loan options available, each of which requires a credit check. There are three primary options to consider:

• Direct PLUS loans: Direct PLUS loans are the only federal student loan that parents can take. You’ll need to submit a FAFSA with your child and complete a parent direct PLUS loan application to borrow.

• Co-signed private student loan: Co-signing a loan with your child will make you equal borrowers. It’s best if you have good credit, a steady income and are willing to take on the responsibility of paying the debt if your child can’t.

• Private college loans for parents: Certain private lenders may offer private college loans for parents to borrow rather than co-signing on a student loan. The debt is your sole responsibility.

How graduate students can get student loans

Graduate student loans include two federal loan options, along with private loans.

Federal direct unsubsidized loans. Graduate students can borrow up to $20,500 each year. To apply, submit the FAFSA. There is no credit check involved.

Federal direct PLUS loans. Graduate students can borrow up to the cost of attendance minus any other financial aid. Your credit is considered. To apply, submit the FAFSA and complete a graduate student direct PLUS loan application.

Private student loans. Apply directly with a bank, credit union or online lender. Your credit history affects the interest rate and repayment terms. Some private lenders may have specific loans for graduate students depending on their field of study. You typically can borrow up to the cost of attendance minus any other financial aid.

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