Ready to begin your college career, but need to know how to apply for student loans? Understanding the exact actions to take is essential for making the entire ordeal as seamless, simple, and efficient as possible.
And we’ve got you covered with all the steps in the student loan application process — from start to finish — to help you ensure college is affordable for your own financial situation.
As all freshly accepted college students know, school can be very expensive. According to The College Board, a single year at a public, in-state university is $9,410. If you opt for a private school, that number jumps to $32,410. Few people can afford to pay that out of their own pockets, so most turn to student loans to foot the bill.
But where do you even start with setting up student loans? Transferring between federal and private loans and their different application processes can be overwhelming.
Don’t worry, though. Here is a step-by-step guide on how to apply for student loans so you can get your college life underway.
How to apply for student loans
Step 1: Before applying for a student loan, exhaust all other financial aid
Before even thinking about applying for a student loan, make sure you exhaust all your other options first. There are other forms of financial aid you can use to pay for college:
Scholarships: Unlike loans, which have to be repaid with interest, scholarships never have to be repaid and are merit-based (like academic or athletic scholarships). You can search for available scholarships at FastWeb, and you can apply for a wide variety of scholarship types from many different sources, including:
- Private businesses
- For-profit institutions
- Professional organizations
- Philanthropists, high profile figures, and celebrities
- Other individuals on a local, state, or federal level
Grants: Like scholarships, grants do not have to be repaid, but are typically based on need rather than merit. You can qualify for grants from the federal government or from your school, as well as some other places. You can get college grants through:
- Your college or university (includes government-issued grants after completing the FAFSA)
- Federal grants (for example, the Pell Grant and the Federal Supplemental Education Opportunity Grant)
- State grants from your state’s grant agency
- Local grants from your area including nonprofits, professional organizations, private businesses, for-profit institutions, and private philanthropists
Work-study programs: With a work-study program, you work at a part-time job related to your area of study and use the money you earn to pay for a portion of your tuition and expenses.
By utilizing these forms of financial aid, you can minimize how much you need to borrow in student loans.
Step 2: Understand your student loan options
When it comes to student loans, there are two main options: federal and private student loans.
Both types of loans offer students temporary funding assistance to pay for the college or university they’ll be attending. Federal student loans come from the U.S. Department of Education, while private student loans come from private institutions like banks, credit unions, and online lenders.
In general, federal student loans should be your first loan choice. They tend to have lower interest rates that are set by Congress and offer more protections and benefits to you, the borrower. Before applying for one or both, you should know the key differences between federal and private student loans.
What is a federal student loan?
Federal student loans are offered by the government, and tend to have lower interest rates and more generous repayment terms than private student loans. As an undergraduate student, you may be eligible for:
- Direct Subsidized Loans: Loans that you can get if you demonstrate financial need as an undergraduate student.
- Direct Unsubsidized Loans: Loans that aren’t based on financial need and are available to any type of student.
With subsidized loans, the government covers the cost of the interest that accrues while you’re in school and for six months after you graduate.
With unsubsidized loans, you’re responsible for all the interest that accrues on your loan, even when you’re still in school.
Federal loans have a grace period. It’s a six-month period after you graduate when you don’t have to make payments on your loans, giving you time to find a job.
When you enter repayment, federal loans have unique perks, such as the ability to enter into an income-driven repayment plan. Under these plans, you may be able to qualify for a much lower monthly bill that is based on how much you make.
What is a private student loan?
If you need more help paying for school than you can get from the federal government, private student loans can help fill the gap. Private student loans are offered by banks or financial institutions and interest rates can vary from lender to lender. Depending on the loan repayment plan you choose, you may have to start making payments while you’re in school.
As an undergraduate student, you’re unlikely to qualify for a private loan on your own. You’ll probably need a cosigner. A cosigner—usually a parent or relative with a stable income and good credit—acts as a guarantor on the loan. Having a cosigner decreases the risk to the lender, making it more likely you’ll get approved for a loan.
Find savings from the best lenders with Purefy
Compare Student Loan Refinance Rates with No Impact to Your Credit Score
Step 3: Gather all your financial information
Whether you plan on applying for federal or private student loans, you’ll need to collect some information before you complete the process to help it go more quickly.
- Tax returns: While you can use the IRS Data Retrieval Tool, it’s helpful to have a paper tax return as well. You should have the tax return from two years ago. You’ll need your parents’ tax returns as well as your own, if you filed taxes.
- Adjusted gross income: You’ll need the adjusted gross income of both yourself and your parents.
- Asset information: You’ll need to provide information about your assets, such as account balances.
- Social Security numbers and birthdates: You’ll need your birthdate and Social Security number.
- A list of schools you’re interested in: Include all schools that you’re even thinking of applying to on the application.
- Information on grants or scholarships you’ve received: If you’ve received any grants or scholarships, you’ll need to enter how much aid you got.
Step 4: Complete the FAFSA
To qualify for financial aid, you must complete the Free Application for Federal Student Aid (FAFSA). It’s what the federal government and colleges use to determine your aid.
It’s free to complete the FAFSA, but it’s a good idea to submit your application as soon as possible. The earlier you complete it, the more likely you are to qualify for financial aid, including grants.
You can complete the FAFSA online. You’ll need to create a Federal Student Aid ID, which you then use to access your application in the future.
Once you finish the FAFSA, you’ll receive a Student Aid Report. This is a summary of your financial information and provides your Expected Family Contribution (EFC), or how much your family is expected to pay toward your education. If you notice a mistake on the Student Aid Report, log into your FAFSA to update it right away.
Step 5: Submit a CSS profile for institutional financial aid
Besides federal aid, you may be eligible for institutional aid, which comes from the school you attend. To qualify, you must submit the CSS profile.
To do so, create an account. Then, select the schools you’re interested in—not all schools participate—and provide information about yourself, your family’s finances, and your assets. There is a $25 fee for submitting the profile, and you’ll have to pay $16 for each additional report.
The College Board has a comprehensive guide on how to complete the CSS profile if you need additional help.
Step 6: Review your financial aid award letter
After you complete the FAFSA and are accepted into college, schools will send you a financial aid award letter, which details what aid you’re eligible to receive. The letter will detail the total cost of attendance, what you got in the form of scholarships or grants, and what federal student loans are available.
To accept, you generally need to sign the letter and return it to the school financial aid office.
Step 7: Decide if applying for student loans is right for you
In some cases, you may find that you need more aid than the school and government will provide. If that’s the situation, private student loans can help.
Private lenders will do a credit check to determine your rates and eligibility, and private student loan interest rates vary by lender. They’re calculated based on your credit score (or your cosigner’s), and by other factors like income and even the type of degree you are pursuing, to ensure you are likely to have the money to pay the loan back.
It’s a good idea to shop around with different lenders to ensure you get the best deal on your interest rate. Luckily, you don’t have to comparison shop manually on your own. Purefy’s rate comparison tool allows you to compare offers from multiple lenders at once.
When you apply, you’ll need to provide much of the same information as you did on the FAFSA. Make sure you know how much you want to borrow and what school you want to attend.
After submitting your application, it can take a couple of weeks to receive your funds. So, fill out an application as soon as possible to make sure you get the money you need on time.
Where to apply for student loans
Applying for student loans can be a difficult experience. From deciding between private and federal student loans or a combination of the two, to the unique processes each lender needs you to follow, it can be stressful and confusing. So how do you know you’re making the right choices to afford your college tuition as easily as possible?
Purefy is here to help. Here’s an at-a-glance infographic to keep handy that explains the entire student loan application process.
And if you need additional private student loan help, visit our rate comparison tool that shows you interest rates, terms, and eligibility requirements from multiple lenders—all in one place with just one quick and easy form.
Find your best interest rate in seconds, choose the right solution for your needs, and apply for your top private loan option, simply and conveniently.
Paying for college tuition
Now that you know how to apply for student loans, you can get the funding you need to pay for college. Make sure you understand all your options so you can minimize how much you need to borrow. Reducing how much you take out in student loans now will help you in the long run after you graduate.
If you need help paying for school, get multiple private student loan offers in minutes. And if you have any questions, feel free to reach out to us by phone at 202-524-1115 or by email at [email protected].