When it comes to student loans, remember you don’t always have to borrow. But if you need to, you should start with federal student loans, then turn to private loans to fill the gaps.
You might already know how much you’ll need from your financial aid letter, but understanding what your options are can help put your mind at ease.
Here’s how to apply for student loans:
How to apply for federal student loans
1. Know your federal loan options
One of the first steps to take to secure a student loan is to know which type of loans are available to you.
- Direct subsidized loans: This type of direct loan is available to undergraduate students and awarded based on financial need.
- Direct unsubsidized loans: These loans are available to undergrads and grad students. They don’t require proof of financial need.
- Direct PLUS loans: These loans are available to parents of undergrads as well as graduate or professional students. The borrower’s credit history is considered for a PLUS loan. Just keep in mind PLUS loans can have higher interest rates, so be sure to compare private student loans first, so that you can pick the best one for your situation.
Before borrowing, make sure you do your research and understand the limits on student loans.
2. Prepare any documents and information you might need
Before you actually apply for student loans, you’ll need to have some basic information handy. Here are some documents and information you should prepare to have for the Free Application for Federal Student Aid (FAFSA):
- Social Security number
- Current address (for student and parents)
- List of all the schools you’re considering attending, including the school’s information like name, address, phone number, and your major
- Tax returns and other tax information for your parents (or yourself if you’re independent — though that’s hard to qualify for)
- Other income information like child support or any other assets like businesses or investments
- Adjusted gross income (AGI) from the last two years
- Any gift aid received like scholarships or grants
There might be other information needed for your loan application process, depending on your situation. But just make sure you have all of your important financial papers and information before moving onto the next step.
3. Fill out the FAFSA
Every student borrower should fill out the Free Application for Federal Student Aid (FAFSA). Even if you don’t think you’ll be eligible for most federal financial aid, you might be surprised to find that you are eligible for reward money or federal loans.
Even if you are not eligible for scholarships or loans due to financial need, you still might be offered a direct unsubsidized loan through your school. It is important to fill out the application as early as possible to maximize your funding. Also, try talking with your school’s financial aid department for a better idea on what type of loans you are eligible for.
4. Review your Student Aid Report
Next, you’ll want to review your Student Aid Report (SAR). If you provided an email address when you filled out your FAFSA, you should automatically be emailed a copy of this report. If not, just follow these steps to view it online or print a copy:
- Go to FAFSA.gov
- Click “Log In”
- Enter your FSA ID
- Go to the “My FAFSA” page
- Click “View or Print Your Student Aid Report (SAR)“
Typically, you’ll be able to access your SAR within two weeks of submitting the FAFSA. Your SAR will be sent to the schools you listed on your FAFSA. They’ll use this information to decide which type of and how much financial aid you’re eligible for.
5. Fill out a CollegeBoard CSS profile
To find out if you’re eligible for institutional aid, you should apply on CollegeBoard’s CSS Profile page. To do so:
- Sign up for a CollegeBoard account
- Go to CSSProfile.org and sign in with your CollegeBoard credentials
- Select “Begin New Profile”
- Select the schools you wish to apply to
- Provide any other information the form asks for
Finish filling out the CSS Profile and submit your application. Though the fees can be waived in certain situations, typically your first report will cost $25 and each additional report will cost $16.
6. Review your financial aid letter
After receiving your FAFSA, any schools you’ve applied and are accepted to will send you a financial aid award letter. Make sure to thoroughly review the letter so you know how much financial aid you’re eligible to receive.
The letter typically includes your total cost of attendance, Expected Family Contribution (EFC), and the loans and other aid you qualify for. Your net cost will be the total cost of attendance, minus whatever gift aid you qualify for.
7. Talk to your financial aid office and accept your financial aid offer
You’ll need to check in with your financial aid office and accept your offer for aid.
Although each school might be different, before your loan funds are dispersed, you’ll typically be required to complete entrance counseling and sign a Master Promissory Note. This is a document stating the terms of your loan and your obligation to repay it.
But be sure to check in with the school’s financial aid office (at the school you’re going to attend) to get the exact details of what you need to do to get your funds.
How to apply for private student loans
If federal loans don’t cover all of your college needs, then you might need to fill in the gaps with private student loans. Make sure you have any documentation you might need and you’re ready to explore your private loan options.
1. Compare rates from multiple lenders
Before you start, it’s important to compare rates from multiple lenders, so you’re confident you’re finding the right loan for your situation. Though you should always take advantage of federal loans first, once it comes to PLUS loans, rates on private student loans can be even more competitive.
Here’s a quick comparison between federal and private loan rates:
|Rates from (APR)|
|Private student loans||Fixed: 3.82%+
|Federal student loans||Undergraduate: 4.53%
|Private student loan and refinancing rates are updated monthly. Federal student loan rates are accurate for the 2019-20 academic school year.|
Comparing private student loan rates with Credible is super simple. You can fill out just one simple form and it only takes two minutes. Plus, we use a soft credit check that doesn’t affect your credit.
|Lender||Fixed rates from (APR)||Variable rates from (APR)|
|5.09% – 12.49%||3.15% – 11.37%|
|4.74% – 11.85%9||2.87% – 10.75%9|
your credit score. 100% free!
Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Bank Disclosures | 2,3College Ave Disclosures | 6Discover Disclosures | 7SunTrust Bank Disclosures | 8EDvestinU Disclosures | 9Sallie Mae Disclosures
Citizens Bank Student Loan Rate Disclosure
Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2019, the one-month LIBOR rate is 1.80%. Variable interest rates range from 2.83%-11.16% (2.83%-11.01% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.40%-12.19% (4.40% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
2. Consider a cosigner
Even if you have excellent credit, you might not qualify for a private student loan without a cosigner. If you do qualify, having a cosigner can greatly increase your chances for acceptance and even get you a lower interest rate which could save you money. Nearly 94% of all private student loans are taken out with a cosigner.
Credible makes it easy to compare rates from multiple student loan lenders with or without a cosigner. You can fill out just one simple form and it only takes two minutes.
Don’t borrow more than you need
Knowing how to apply for student loans can help you get the funding you need for your degree. But always remember to be smart about your student loans — understand all of the terms and expectations before borrowing and don’t borrow more than you absolutely need.
If you need some more ideas on affording school, check out some of the best ways to pay for college.