Where to Get a Student Loan for College
With the rising price of tuition, fees, and room and board at four-year public colleges and private nonprofit institutions, more students in all income brackets have been taking out student loans.
If you’re wondering where to get a student loan for college, you have two options. The first is getting a federal student loan through the government. Federal student loans account for more than 93% of all student loan debt. The second option is a private student loan, which is given by a bank, credit union, or online lender. Private student loans are not based on need, but rather your college’s cost of attendance, your credit profile, and your income (or your cosigner’s income).
Keep reading for more on where to get a student loan, including both federal student loans and private student loans.
Key Points
• Students can get federal student loans through the government and private student loans through banks, credit unions, and online lenders.
• To get a federal student loan, students must complete the Free Application for Federal Student Aid (FAFSA®), which determines eligibility for various federal aid programs.
• Private student loans are based on creditworthiness and income, often requiring a cosigner, and may have varying interest rates and terms.
• Private student loans should be prioritized after all federal aid has been exhausted, as private loans don’t offer the same borrower protections as federal loans.
• It’s crucial to understand the terms of any loan, including interest rates (fixed vs. variable), repayment schedules, and potential fees. Comparing different loan options ensures that borrowers choose the most suitable and affordable financing for their education.
Prioritizing a Plan
When creating a plan to fund college education, it’s wise to first explore any avenues for free money in the form of grants and scholarships.
By taking a look at the remaining balance after any free money has been found, exploring federal loans can be a smart next step. They come with income-based repayment options and the ability to request loan forgiveness under some circumstances. There are also work-study programs that can help students earn money while attending college.
If all needs are not covered, then there are private student loans to consider, along with Direct PLUS Loans that parents can apply for to get funds for their children.
After that, some people may seek out personal loans to cover living expenses while in school and/or emergency loans from the college.
Here are more specifics about these options.
Where to Get a Federal Student Loan
To obtain any kind of federal student loan, a student must first fill out the Free Application for Federal Student Aid, commonly called the FAFSA®.
After filling out this form, a student will have insights into what federal funding is available for them, along with work-study options. More specifically, each school that a student applies to can send a financial aid offer letter, which includes information about how to apply for student loans that they qualify for.
Two broad types of federal loans are:
• Direct subsidized loans: Direct Subsidized Loans are for undergraduates that demonstrate financial need. With this loan, the U.S. Department of Education pays the interest while the student is enrolled at least half-time, during the grace period after leaving school, and during any deferment periods.
• Direct unsubsidized loans: Direct Unsubsidized Loans are available for undergraduate students, as well as graduate and professional ones, that do not demonstrate financial need. Interest begins accruing right away.
Where to Get a Private Student Loan
A variety of financial institutions offer private student loans and have their own criteria for qualification. Some allow students to apply online and can give quick responses, while others go a more traditional route with in-person applications.
Private lenders will typically review a student’s income, plus that of any cosigner, along with credit histories and more to make lending decisions. A lender might grant a private student loan to someone whose credit isn’t stellar, but charge a higher interest rate.
When applying for a private student loan, it’s important to understand the loan terms before signing the note. This includes the interest rate and whether the rate is fixed (staying the same over the life of the loan, with the principal and interest payments also staying the same) or variable.
Pros of Private Student Loans
Benefits of private student loans can include the following:
• They can bridge the gap between what is owed after federal student loans are applied to the balance and what is needed to attend college.
• Students can apply for them any time of the year, without the strict deadlines associated with federal loans.
• Borrowers may have more choices in interest rates and terms.
• The loans may not include origination fees or prepayment fees, although that isn’t universally true.
Cons of Private Student Loans
Potential cons can include these:
• It isn’t unusual for a private lender to require a cosigner because college students often don’t have enough income to qualify or have established a good enough credit profile to get the loan on their own.
• Students who are considered a higher credit risk may pay more in interest.
• Private student loans don’t come with many of the benefits associated with federal loans, such as forgiveness programs and income-based repayment plans.
• Students may borrow more than they can ultimately afford, and these loans are typically not dischargeable in bankruptcy proceedings.
Recommended: A Complete Guide to Private Student Loans
Other Types of Loans
In addition to federal and private student loans, students and their families may consider other borrowing options to cover educational expenses.
Parent PLUS Loans
Students and parents can consider the Parent PLUS Loan, in which parents can apply for federal funding to help their children attend college.
Eligibility for a Parent PLUS Loan isn’t based on financial need, but credit is checked. If applicants have a credit history that’s considered “adverse,” they “must meet additional requirements to qualify.”
According to the Federal Student Aid office, adverse credit can include:
• Having accounts that, in total, have an outstanding balance of more than $2,085 and are at least 90 days delinquent.
• A default or a bankruptcy discharge during the previous five years.
• Involvement in a foreclosure, repossession, or tax lien situation in the previous five years.
• Write-off of federal student loan debt or wage garnishment during the past five years.
Qualifying parents of a dependent undergraduate student can receive funding through this loan program to cover education-related costs that are not covered by other financial aid.
Personal Loans
It’s also possible to apply for personal loans from financial institutions to cover living expenses during college or to address an emergency. There are downsides to this, though, including:
• Interest rates will likely be higher than student loans, along with shorter payoff periods (which means principal and interest payments can be higher).
• There isn’t typically a grace period, which means repayment starts right away.
• These loans don’t come with deferments or forbearance, as can be available through federal student loans.
Emergency Loans
In an emergency, a student might want to reach out to the college financial aid center to see if the school offers emergency loans for those in need. These loans would not typically be large, perhaps $1,000 to $1,500, but might be enough to address a dire situation.
Each college has its own guidelines, so check them out carefully. Some charge interest; others may not. Some may charge a service fee; others may not. As with personal loans, repayment may start immediately, so factor that into budget planning.
The Takeaway
When exploring options to finance a college education, it’s essential to understand the various student loan avenues available and where to get them. Federal student loans, accessible through the Free Application for Federal Student Aid (FAFSA), often offer lower interest rates and flexible repayment plans. Private student loans, provided by banks, credit unions, or online lenders, can help bridge funding gaps but may come with higher interest rates and less lenient repayment terms.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
FAQ
What are the main sources for obtaining a student loan?
The two primary sources for student loans are federal student loans provided by the government and private student loans offered by banks, credit unions, and online lenders. Federal loans account for over 93% of student loan debt and are typically based on financial need, while private loans depend on creditworthiness and income.
How do I apply for a federal student loan?
To apply for a federal student loan, you must complete the Free Application for Federal Student Aid (FAFSA). After submission, you’ll receive information on the types and amounts of federal aid you qualify for, including work-study options. Each school you apply to will send a financial aid offer letter detailing your eligible loans.
When should I consider private student loans?
Private student loans can be considered after exhausting federal aid options. They can bridge the gap between the remaining cost of attendance and the amount covered by federal loans. Private loans are based on creditworthiness and may require a cosigner. They often lack the benefits of federal loans, such as income-driven repayment plans and loan forgiveness programs.
SoFi Private Student Loans
Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
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