How to Get Approved for Student LoansJuly 9, 2021
The cost of college continues to rise. As a result, it can be hard to pay for college, even when you receive scholarships and grants.
If your scholarships and grants don’t cover the full cost of college, you might need to turn to student loans. The requirements for student loans depend on the type of student loan you get.
Federal student loan eligibility is easier to meet, since these loans have fewer requirements, with the only criteria being U.S. citizenship. On the downside, you can only take out so many federal student loans each year.
On the other hand, private student loan eligibility usually includes credit, income and other criteria that can be harder to meet. These funds, however, can help cover any leftover amount after you’ve taken out federal loans.
Here’s what you need to know about how to get approved for a student loan.
Federal Student Loan Eligibility Requirements
When students max out their scholarship or grant options (or don’t qualify for need-based aid), federal student loans are often the first place they turn. Student loan eligibility requirements for federal loans include:
- U.S. citizen or eligible non-citizen: For the most part, you need to be a citizen of the United States or meet non-citizen residency requirements.
- Valid Social Security number: There are some students that don’t need a valid Social Security number (like those from certain U.S. territories), but most applicants should have an assigned number.
- Demonstrate financial need: When getting an unsubsidized loan, the financial need isn’t required, but subsidized federal student loans require that you show need.
- Register with Selective Service: Male applicants should be registered for the military draft.
- Show you’re qualified to continue your education: You must have a high school diploma, GED or show that your homeschool experience is in line with state law.
- Be accepted (or enrolled) in an eligible program: To receive federal student loans, you need to be enrolled at an eligible school and take a regular course of study. You should be enrolled at least half-time to qualify.
- Fill out the Free Application for Federal Student Aid (FAFSA): You need to complete the FAFSA application and sign the certification statement at the end, affirming that you’re not in default of student loans and that you’ll use the money for education.
Unsubsidized vs. Subsidized Student Loans
Federal student loan qualifications are different depending on the type of program you’re interested in. The difference between an unsubsidized vs. subsidized student loan is that the government covers your interest while you’re in school when you have a subsidized student loan and unsubsidized student loans will accrue interest while you are in school.
A subsidized student loan has extra federal student loan eligibility requirements related to financial need. Your FAFSA will be used to determine if your family meets the qualifications to have the government cover your interest. There is no requirement to demonstrate need in order to receive an unsubsidized student loan.
Private Student Loan Eligibility Requirements
Once you reach your federal student loan maximum, you might still have a college funding gap. In these cases, private student loans might be able to help you get the money you need. Private student loan requirements are a little more stringent than federal student loan qualifications.
- Income requirements: You need to be able to demonstrate that you can repay the student loan.
- Credit criteria: Private lenders will check your credit. Each lender has its own student loan qualifications and you might need a credit score of at least 650 or more.
- Meet age requirements: The state you live in matters. You might need to be 19 or even 21 in some states, even though most states allow borrowing at age 18.
- Other requirements: Depending on the lender, learning how to get approved for student loan can come with other requirements, including documentation of your U.S. citizenship or residency status and current employment, as well as proof of enrollment in a qualified institution of higher learning.
Depending on the situation, private student loans can be advantageous. They often have lower interest rates than federal loans for those with excellent credit. Additionally, private student loan limits are higher than federal student loan limits, and you can apply for private loans at any time, rather than waiting for the new FAFSA deadline.
Tips to Improve Your Chances of Being Approved for Private Student Loans
Federal student loan eligibility is usually easy to meet because they don’t come with strict credit score and income requirements. Even though private student loan requirements can be harder to meet, there are steps you can take to improve your chances.
- Plan to maintain a job during college: If you have a current job, showing your income with the intent to continue the job during college can help you qualify for private student loans.
- Boost your credit score: Establish credit with the help of a credit card or other loan (paid off as soon as possible) to help meet the credit requirements.
- Find a cosigner: Someone who’s willing to be responsible for the loan and has their own good credit and income can cosign on the loan so that you receive the funding. Later, if the lender offers a cosigner release, you may be able to let your cosigner off the hook. Alternatively, you may be able to refinance the loan into your own name.
Apply for Student Loans With ELFI
When choosing between federal vs. private student loans, carefully consider your situation and what is likely to work best for you. As long as you meet the qualifications, it’s possible to get both types of loans if needed.
ELFI offers undergraduate student loans and graduate student loans for those who need to close a college funding gap.* Use ELFI’s student loan payment calculator to see what your payments could look like, and prequalify for education funding without impacting your credit.