In an ideal world, financial aid you don’t have to repay would fund your college education. Unfortunately, most students can’t get enough grants and scholarships to cover all their tuition. If you max out on free sources of financial aid, you’ll need to figure out how to get a student loan to pay the remaining costs of your education.
How to get a student loan
So what can you do when grants, scholarships, money from savings, and working doesn’t cover the full cost of your education? At this point, you’ll need to explore your options for federal student loans and private student loans. Here’s how to do it.
Federal student loans
It’s always a good idea to max out federal student loan options before you consider private loans. This is because federal loans come with a variety of unique benefits, including:
- Student loan interest rates set by the government
- Subsidized interest for eligible loans in deferment
- A grace period before repayment begins after graduating or dropping below full-time status
- Access to income-driven repayment plans
- Clear criteria for deferment and forbearance
- Eligibility for student loan forgiveness if you work in a qualifying public interest position
Fortunately, figuring out how to get a student loan from the federal government is easy.
The process starts with filling out the FAFSA. The FAFSA should be completed as soon as possible when it becomes available on Oct. 1 each year, as many sources of financial aid are limited. Our ultimate guide to filling out the FAFSA can help you complete this online form.
Completing the FAFSA is necessary not only to qualify for federal loans but also to become eligible for many sources of free financial aid, such as need-based Pell Grants. You have to fill out the FAFSA every year to receive financial aid. The forms should be completed in the year before you need aid to pay tuition.
When you complete your FAFSA, you’ll list the schools you’re interested in attending. Information from your FAFSA will be sent to those schools. Each school will put together a financial aid package that shows how much in federal student loans you qualify to borrow.
However, it’s important to note that just because you qualify for a certain amount of federal loans doesn’t mean you have to borrow the full amount. The less debt you take on while in school, the less you’ll have to pay back when you graduate. Your school will tell you how to accept all or part of your financial aid package.
Undergraduates can take out between $5,500 and $12,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans.
Private Student Loans
Private loans work a little bit differently from federal loans. So it’s important to figure out how to get student loans from private lenders. When considering private loans versus federal loans, remember that with private loans:
- Interest rates are determined by your creditworthiness.
- Interest generally begins accruing as soon as your loan is disbursed.
- Repayment terms and benefits are determined by the lender or servicer, rather than by the federal government.
Borrowing limits also differ with private student loan lenders. Rather than having annual and aggregate limits to how much you can borrow, private loans typically let you borrow up to 100% of the cost of attendance minus financial aid. If your cost of attendance exceeds the maximum amount of federal student loans you’re able to borrow, private loans can help fill that gap.
Also unlike federal student loans, you don’t qualify for private loans through the FAFSA. Instead, you apply to the bank, credit union, or another lender. Because terms, conditions, interest rates, and other factors can vary depending on the lender, it’s important to do your due diligence and research private lenders to make sure you’re getting the best deal possible.
Again, while it might be tempting to take out the maximum amount you’re approved to borrow, you should explore all other options for funding your education before relying on student loans, particularly private student loans. This is because private loans don’t offer the generous repayment benefits that federal student loans do.
As far as timing goes, you should fill out the FAFSA as soon as you are able. Then, wait to apply for private student loans until you have received your complete financial aid package from your institution. That way, you know you’re only borrowing as much as you absolutely need.
Honey Smith contributed to this article.
Need a student loan?Here are our top student loan lenders of 2019!
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 7/1/2019. Variable interest rates may increase after consummation.
2 Important Disclosures for Earnest.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
4 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
5 Important Disclosures for Citizens.
6 Important Disclosures for Suntrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
* Offer valid for new Custom Choice Loans for which applications are submitted for a credit decision between 12:00:00am EST on June 1, 2019 and 11:59:59pm EST on August 31, 2019. A 0.50% interest rate reduction will be included in the loan options presented to an applicant during the online application process, upon passing the initial credit review. The interest rate reduction will be applied as of the first disbursement date and will be effective for the life of the loan.
7 Important Disclosures for PNC.
Fixed Annual Percentage Rates (APRs): APRs range from 4.52% to 9.58% for a 5-year term. APRs range from 5.05% to 10.26% for a 10-year term. APRs range from 5.55% to 10.84% for a 15-year term. Fixed rates are based on the creditworthiness of the borrower and co-signer, if any. Loan Payment Example: The monthly payment per $10,000 borrowed at a fixed rate range of 5.05% APR to 10.26% APR for 10 years means you would make 120 payments which may range from $131.94 to $207.24. For the fixed rate loan, the monthly payment will remain fixed for the term of the loan. Payments may vary for other repayment term options.
Variable Annual Percentage Rates (APRs): APRs range from 4.90% to 9.92% for a 5-year term. APRs range from 5.38% to 10.57% for a 10-year term. APRs range from 5.85% to 11.11% for a 15-year term. Variable rates are based on the London Interbank Offered Rate (LIBOR) index plus a margin depending on the creditworthiness of the borrower and co-signer, if any. The LIBOR index, adjusted quarterly, is equal to the average of the one-month LIBOR rates as published in the “Money Rates” section of the Wall Street Journal on the first business day of each of the three (3) calendar months immediately preceding each quarterly adjustment date. The LIBOR index is currently 2.47%. If the index increases or decreases, your rate will increase or decrease accordingly. Loan Payment Example: The monthly payment per $10,000 borrowed at a variable rate range of 5.38% APR to 10.57% APR for 10 years means you would make 120 payments which may range from $135.93 to $212.65. For the variable rate loan, the monthly payment may increase or decrease if the interest rate increases or decreases. Payments may vary for other repayment term options.
APRs and loan payment examples are for the fully deferred repayment option for the Undergraduate & Graduate loan programs and include the 0.50% interest rate discount for automatic payments. The lowest APR is available to well qualified applicants. Your actual APR will be based on your credit qualifications, selection of fixed or variable rate option, loan program, repayment term, repayment option and whether you elect the automatic payment feature. Loan payment examples assume 30 days to first payment after the deferment period (45 months in school and 6 month grace period). Payments vary for other rates, repayment terms and repayment options.
In addition to Undergraduate and Graduate loans, PNC offers loans for Health & Medical Professions, Health Professions Residency and Bar Study. Rates may vary by loan program and are subject to change at any time. Visit pnconcampus.com for current rates, additional loan payment examples and more details about the Solution loan products.
Please note: PNC reserves the right to modify or discontinue the terms of these program at any time without notice. You are encouraged to explore all scholarship, grant and federal borrowing options before applying for a private loan. Private loans are subject to credit approval.
PNC is a registered service mark of The PNC Financial Services Group, Inc.
7 Important Disclosures for Discover.
Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
|3.96% – 11.98%1||Undergraduate, Graduate, and Parents|
|3.37% – 10.75%*,3||Undergraduate and Graduate|
|3.35% – 11.44%2||Undergraduate and Graduate|
|3.66% – 9.64%4||Undergraduate and Graduate|
|3.36% – 11.62%5||Undergraduate and Graduate|
|3.14% – 10.68%6||Undergraduate and Graduate|
|4.90% – 11.11%6||Undergraduate and Graduate|
|3.37% – 11.87%7||Undergraduate and Graduate|