How to get a student loan

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College tuition fees are a problem for many students. Grants and scholarships are limited for now, so borrowing money may be the only way to afford a college degree.



Man holding a bookshelf: A woman studies in the college library.


© Tatiana Frank / Shutterstock
The woman is studying in the library of the college.

You can get a student loan through the federal government by completing the Free Federal Student Aid Application (FAFSA), or you can apply for the required funding from a private lender. Here’s what you need to know about this process.

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How to get a federal student loan

Because federal student loans provide generous protection for borrowers and no credit checkIt’s best to apply for them first, especially if you are an undergraduate student.

To unblock federal student loans and federal student aid, you first need to complete FAFSA Form… It’s free and comes out every October. Please complete it one year before you plan to attend school and reapply with new FAFSA form every school year.

When you receive the results, you will know if you are eligible for subsidized or unsubsidized federal student loans… The subsidized loans are for undergraduate students in need of funding. If you qualify, the US Department of Education will pay your interest expenses during your school attendance and grace period. You pay all interest expenses with an unsubsidized loan.

Here are the steps for the application process:

  1. Create an account. Students will need create a Federal Student Aid (FSA) account to fill out the FAFSA.
  2. Collect documents. You can get an idea of ​​the FAFSA at worksheet provided by FSA… Make a list of schools that must receive your FAFSA and collect your Social Security number, driver’s license number, federal tax return, proof of income (usually with W-2 forms), and current bank statements. If you are listed as a dependent, you will also need to obtain these materials from your parents.
  3. Fill out the forms. It takes about 30 minutes to complete the FAFSA.
  4. Check your SAR. After you submit the FAFSA, the Department of Education will send you a Student Assistance Report (SAR) that will summarize all the information you entered. Check the SAR accuracy.
  5. Receive offers for financial assistance. The colleges you have listed on the FAFSA will calculate your financial aid and send you financial aid letterwhich can include a mix of loans, grants, and work and study options.
  6. Accept financial help. Your offer of financial assistance may vary from school to school. After you have compared the offers and selected a school, contact the school to accept financial assistance. If it includes federal student loans, the school will tell you how to accept them.

How to get a private student loan

If you have exceeded your federal student loan loan limit or are not eligible for federal financial aid, you may need to pay some school expenses using private student loan… They come from banks, credit unions and online lenders.

Here’s how to get student loans from a private lender:

  1. Shop from multiple lenders. Compare loan amounts, interest rates, commissions and repayment plans. Since you are likely to have a relationship with this lender for several years, it is also a good idea to assess their hardship options in case you run into financial problems later on. The lender should also have good reviews and responsive customer service.
  2. Check your eligibility. Before completing the application, make sure that your credit history and income meet the requirements of the lenders. Most lenders offer pre-qualification, which allows you to see if you qualify and what potential rates you will receive without harming your credit history. If you are not eligible, you will need a collaborator who can.
  3. Fill out the application. Usually, you need to agree to a credit check and provide details such as your school, cost of attendance, degree type, citizenship information, social security number, proof of income and debt.
  4. Wait for verification. The lender will confirm the cost of your school attendance, which may take several weeks. Once your school verifies the information, the lender will usually donate funds directly to the school.

Considerations before borrowing

Since student loans are long term obligations, it is important to take the time to come up with a long term plan. Here are a few things to consider before applying for a loan.

Run out of other resources first

Student loans, whether federal or private, have to be repaid at some point, and all loans come with an additional charge of interest. Grants and scholarshipson the other hand, there is no need to refund if you qualify.

Some colleges, universities, and vocational schools offer their own financial aid, so ask about your options. You can also apply for scholarships and grants offered on the websites of private organizations such as Scholarships.com and Fastweb maintain a database of millions of assistance opportunities. You can also earn extra money while studying to cover tuition or rental costs.

Borrow only what you need

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Borrowing the minimum amount required to pay for tuition helps to lower monthly payments after graduation. Most schools will help you calculate the cost of tuition, fees, accommodation and meals each year.

Use this information to create a budget to determine how much money you need. Then deduct any funds you expect to receive from scholarships and grants, and part-time work, if applicable. Then consider adding a small buffer on top of that.

If you are worried about losing, the good news is that you may change your mind later. If the term of study does not exceed the same academic term, you can request the recovery of a portion of the unused student loan amount.

Think about the long-term impact on your finances

Before applying for a loan, analyze the numbers to understand what you are getting yourself into. Use student loan calculator to find out what your monthly payments after graduation will be and if you are comfortable with that amount. Also check how long it will take to pay off the debt and how much interest you will pay over the life of the loan.

Private loans come with reservations

Although private student loans can be a great option when you are not eligible for adequate federal assistance, it is important to understand the shortcomings. First, private loans are not eligible for some of the borrower protections that come with federal student loans, such as loan forgiveness and income based payment plans.

Delay and patience options may also differ depending on the lender. And if the loan has a variable interest rate, it can increase at any time during repayment.

As a result, it is generally best to view private loans as a last resort after you have exhausted your federal loans and used other forms of assistance.

Other ways to pay for college tuition

Before applying for student loans that can end up being extremely costly, check out your other resources for college tuition fees.

Scholarships

Scholarships can come directly from your school or from a third party organization. In most cases, you do not need to return this money. Exceptions may include college dropouts, failing to meet the minimum GPA requirement, or changing majors if the scholarship was earned through a specific program.

Find out what your school has to offer and use scholarship search engines to make the most of the opportunities available to you.

Grants

Like scholarships, grants refunds are generally not required, although some may have requirements that you must fulfill to avoid this. The federal government offers grants to students with financial needs, and you can also get them through your school or private organization.

Study of work

Federal work-study program provides college students with a part-time job both on campus and off campus. In some cases, schools may enter into agreements with third-party employers so that you can get a job while you study. The job and study opportunities available will be listed after you complete the FAFSA.

Underemployment

If you need more flexibility than what the work-study program offers, you might consider looking for a part-time job yourself. Just make sure you find a job that fits well with your schedule, and try to avoid conflicts with lessons and homework.

Employer benefits

Some employers offer training compensation as employee benefits. Depending on the employer, certain obligations may be attached to him. For example, you may need to work for a company for a certain amount of time before you qualify. The advantage is also usually limited.

The essence

While it is recommended that you exhaust all grant and scholarship options first, knowing how to get a student loan is an important part of your college admission planning. Start by filling out the FAFSA to find out how much federal aid you can get, and then look for private student loans to fill any funding gaps.

The work you put into your student loan applications will help you keep your study costs down so you can focus on your studies and your post-graduate career.

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