What To Do if You’re Denied a Student Loan

Getting denied for a student loan can feel like a dead end, but it doesn't mean you're out of options. You can take several steps to help, such as filing an appeal with your financial aid office, improving your credit score, or reapplying with a creditworthy cosigner. You can also explore alternative ways to cover college costs, including grants, scholarships, and work-study. 

Here's what to do if you're denied a student loan so you can access the financing you need to pay for school. 

Current private student loan rates

Why student loan applications get denied

Student loan applications get denied for a variety of reasons, such as:

• Missing or inaccurate information on your application: Your student loan application could get denied for a simple reason: You provided inaccurate or incomplete information. Maybe you entered your Social Security number incorrectly, are missing a signature, or didn't upload all the required documentation. This could be a roadblock, whether you submitted the FAFSA for a federal student loan or filled out an application for a private student loan. It’s important to triple-check all your details before you hit the “Submit” button. 
• Not fulfilling citizenship requirements: To access federal student loans, you must be a U.S. citizen or eligible noncitizen with a valid Social Security number, in most cases. Private lender rules vary, but they may require international students to apply with a cosigner who's a U.S. citizen or permanent resident. 
• Not meeting enrollment or school eligibility requirements: You could also get denied for a student loan if you're enrolled less than half-time or are attending an ineligible school. Schools that are eligible for federal student loans have a federal school code. 
• Insufficient credit: You could get denied for a private student loan if you or your cosigner has a low credit score. An adverse credit history can also disqualify you from getting a federal parent or grad PLUS loan. 
• Limited income: Private lenders evaluate your income when you apply for a loan. If it's on the low side, a lender may decide you can't afford repayment and deny your loan request. 
• High debt-to-income ratio: Private lenders also look for a low debt-to-income ratio to make sure you can afford repayment. Your debt-to-income ratio compares your monthly debt payments with your gross (pre-tax) income. 
• Not making satisfactory academic progress at school: Federal student loans and some private student loans require you to stay on track academically. Satisfactory academic progress involves earning a certain number of credits and a minimum GPA.

What to do immediately after your student loan is denied

If you're denied a student loan, review the denial notice to determine the reason for the rejection, which will inform your next steps. 

“Your first step is to figure out why,” says Kate Lewis, a college counselor and founder of College Search Guide, LLC, which offers assistance with the college financial aid process, among other services. “Student loan lenders are required to tell you why your student loan was denied.”

If weak credit was the problem, check your credit report for any red flags or errors. If you spot mistakes, file a dispute to have them removed. 

If, on the other hand, your issue was inaccurate information, review your application to find the errors. Look over details like your income, school information, and loan amount, and make sure you're not missing any documentation. 

Even a small error could trigger a student loan denial, but it could be easy to fix your student loan application before you reapply. 

Consider adding a student loan cosigner or improving your credit

If weak credit is the reason for your student loan denial, consider adding a cosigner to your application or improving your credit. The majority of students — 95% of undergraduates and 72% of graduate students — take out private student loans with a cosigner, according to Enterval Analytics’ Private Student Loan Semi Annual Report. 

“Lenders base eligibility and interest rates on the higher of the two credit scores when a borrower applies for a private student loan with a cosigner,” explains financial aid expert Mark Kantrowitz. “So, you're more likely to qualify when you apply with a cosigner.”

Along with improving your chances of approval, applying with a cosigner could also help you get a better interest rate. Your cosigner reduces the lender’s risk since they're responsible for repaying the loan if you can't.

If you don't have a cosigner, work on improving your credit before you apply. Making on-time payments on debts, paying down your credit card balances, and disputing any errors you might find on your credit report can all help.

If you're new to credit, consider taking out a credit-builder loan, opening a secured credit card, or becoming an authorized user on someone else's credit card. Alternatively, you could look for private student loans that don't require a cosigner. The catch is that non-cosigned private student loans typically have higher rates and fees than cosigned loans. Consider whether you can afford repayment before you borrow. 

Explore federal student loan options first

Before turning to private student loans, it's usually best to maximize your federal student loan options. 

“Federal student loans are generally cheaper, more available, and have better repayment terms,” says Kantrowitz. They also have Teacher Loan Forgiveness, Public Service Loan Forgiveness, death and disability discharges, and income-driven repayment plans, he notes. 

Plus, Direct Subsidized and Unsubsidized Loans don't require a credit check or cosigner. You can access these loans by submitting the FAFSA each year you're in school. If you're a dependent student, your parents will provide their information on the FAFSA, as well. 

PLUS loans for graduate and professional students, as well as parents of dependent undergraduates, are also available. These loans require that the borrower doesn't have adverse credit. If your credit is an issue, you might still qualify by applying with an endorser (similar to a cosigner) and participating in credit counseling.  

You can apply for a Direct PLUS Loan on the Federal Student Aid website. However, starting on July 1, 2026, grad PLUS loans will no longer be available for new borrowers. Parent PLUS loans will also have a reduced annual limit of $20,000, and a new lifetime limit of $65,000 per student. 

Alternatives if you’re denied a student loan

If you're denied a student loan, it's worth exploring student loan alternatives, such as: 

• Scholarships and grants: These are both forms of gift aid that you don't have to pay back. You can find opportunities on scholarship search databases or through your financial aid office. Students with financial need may also qualify for federal or state grants, such as the Pell Grant. 
• Tuition payment plans: Colleges may let you spread out the cost of tuition over the year if you can't pay it up front. Some tuition payment plans charge an enrollment fee. 
• Work-study: The federal work-study program connects students with financial need to part-time jobs related to their course of study. You can use your earnings to pay for tuition or living expenses. 
• Community college: To keep costs down, you could consider a “2+2” approach — attend community college for 2 years before transferring to a 4-year college to finish your bachelor's degree. Just make sure your credits will transfer to the university you plan to attend.
• Employer tuition assistance: Some companies offer tuition assistance to qualifying employees. This could be a valuable way to gain work experience while getting help paying for college. 

Should you reapply or choose a different student loan lender?

If your student loan application was denied, start by finding out why. If you were simply missing information or documentation, you can correct your application and reapply with the same lender. If you were denied due to weak credit, you might be approved if you reapply with a cosigner. Adding a cosigner can help you qualify if you can't meet lender requirements on your own.

Reapplying without making changes, however, may lead to another denial. In this case, comparing other lenders may be the better option. Some have more flexible credit, income, and debt-to-income requirements than others, and a few offer student loans without a cosigner, often to students in their junior and senior years.

In general, it's wise to shop around with multiple lenders to find your best loan offer. Many lenders let you prequalify online so you can check your potential rates and terms without any impact on your credit score.