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Whether you apply for federal or private loans, you’ll need to meet several student loan requirements to receive your funds. Those requirements can vary depending on what type of loan you want.

It’s important to know exactly what the requirements are before applying. Because while student loans are a popular way to help pay for college, getting approved isn’t a given. Read on to learn the requirements for different types of federal loans as well as private loans.

Federal Student Loan Requirements

There are four different types of federal student loans available to college students and their parents. Loans generally require:

•   Demonstrated financial need (for most programs)

•   U.S. citizen or eligible non-citizen

•   Social Security number

•   Enrollment in or acceptance to an eligible degree or certificate program

•   Attendance at least half-time

•   Maintenance of satisfactory academic progress

•   Completion of the Free Application for Federal Student Aid (FAFSA®) form

•   Agreement to use the loan for educational purposes only

•   You’re not in default on a federal student loan and don’t owe money on a federal grant

•   High school diploma or GED certificate, state-approved homeschool setting, or enrollment in an eligible career pathway program and “ability-to-benefit” alternative

Depending on the type of loan, though, there may be additional requirements that parents or students need to meet. Read on for a quick breakdown of some additional requirements by loan type.

Direct Subsidized Loans

With Direct Subsidized Loans, the federal government covers your interest costs while you’re still in school. To qualify, you need to be an undergraduate student enrolled at least half-time at a participating school that will lead to a degree or a certificate. And you must show financial need through the FAFSA form.

Direct Unsubsidized Loans

With a Direct Unsubsidized Loan, you do not need to demonstrate financial need, and you are responsible for paying interest on the loan from the time you take it out. To qualify, you must be an undergraduate, graduate, or professional student who is enrolled at a participating school at least half-time. Typically, the program must result in a degree or certificate.

Recommended: College Tuition Payment Plans

Direct PLUS Loans

You can apply for a Direct PLUS Loan if you’re a graduate or professional student, or a parent of an undergraduate student. You generally can’t have an adverse credit history, which means, as stated by the Department of Education (DOE), you may not qualify if you have any of the following on your credit report:

•   Accounts with a total outstanding balance over $2,085 that are 90 or more days delinquent, or that have been placed in collection or charged off within the last two years.

•   Default determination within the last five years.

•   Bankruptcy discharge within the past five years.

•   Repossession during the last five years.

•   Foreclosure within the last five years.

•   Charge-off / write-off of federal student loans during the last five years.

•   Wage garnishment within the last five years.

•   Tax lien within the past five years.

That being said, if you do have an adverse credit history, you may still be able to receive a Direct PLUS Loan if you meet either of the following requirements and also complete credit counseling:

•   You get an endorser who does not have an adverse credit history.

•   You demonstrate to the DOE that you have extenuating circumstances relating to your adverse credit history.

Recommended: How To Pay for Grad School

Direct Consolidation Loans

A Direct Consolidation Loan allows you to consolidate multiple federal loans into one loan. To qualify, you must have one or more eligible loans and meet other requirements, including:

•   The loans must be in repayment or in the six-month grace period after you leave school.

•   In general, you must have at least one loan that isn’t already a consolidated loan.

•   If one or more loans are in default, you must make at least three consecutive monthly payments or agree to repay the Direct Consolidation Loan under one of the available income-driven repayment plans.

•   If your wages are being garnished to make payments on a defaulted federal loan, you can’t consolidate it until the wage garnishment order has been lifted or the judgment has been vacated.

Private Student Loan Requirements

While federal student loans often have the same requirements across the board because the DOE is the lender on all of them, that isn’t the case with private student loans. With private loans, requirements vary by lender, which means you may qualify for a loan from one private student loan company and not with another.

The requirements for a private student loan can also depend on what type you’re applying for, such as an undergraduate loan, graduate loan, or specialized loan.

In general, all private student lenders require a credit check and a minimum annual income. This means that if you don’t have a credit history, you may need a cosigner with an established credit history and a solid income to apply for the loan with you.

Each lender has different requirements when it comes to student loans. Common requirements among major private student loan companies include:

•   U.S. citizen, permanent resident, or international student.

•   Social Security number (some don’t require this for international students).

•   International students generally must have a cosigner.

•   Attendance at an eligible school.

•   Enrollment in a degree program and attendance at least half-time (some allow you to be less than half-time).

Depending on the lender, there may be other student loan qualification requirements and limitations, so it’s important to shop around to compare lenders and read the terms to make sure you qualify.

Also, look for private student lenders that allow you to get prequalified with just a soft credit check. This can give you an idea of your approval chances and show you possible loan terms you might qualify for without dinging your credit score.

The Takeaway

There are a number of requirements you may have to meet in order to qualify for a student loan. The requirements for different types of federal student loans tend to have more overlap, as they all have the same lender. Some are administrative, such as having a Social Security number. Others are risk-related, like not being in default on any previous student loans. Requirements for private student loans vary from lender to lender.

If you’re getting ready to apply for a loan to fund your education, make sure to explore your options and compare terms and rates. SoFi offers private student loans with fixed or variable rates and a number of repayment options.

SoFi offers no-fee private student loans for undergraduate and graduate students or their parents.

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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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There are several legitimate programs that federal student loan borrowers can utilize to have their federal student loans forgiven. Unfortunately, there are also student loan forgiveness program scams. Confusion surrounding loan forgiveness can create space for scammers to thrive. Most commonly, companies will promise something that cannot be done, or charge an upfront fee for something that can be done online for free.

The real trick for borrowers will be distinguishing between a company that is providing student loan counseling in a fair and legitimate way from a company that is trying to take advantage of unsuspecting students.

Is Student Loan Forgiveness a Scam?

There are millions of students paying college student loans and the idea of having those student loans forgiven can be very appealing. There are legitimate student loan forgiveness programs that are available to federal student loan borrowers who meet the program requirements.

These include programs like Public Services Loan Forgiveness or the Teacher Loan Forgiveness Program. There may be other options for forgiving student loans, depending on your background and program requirements.

What Is a Student Loan Forgiveness Scam?

A student loan forgiveness scam is when a service makes a promise that they cannot deliver on. For borrowers looking to get out of student loan debt quickly, these promises can seem promising. Unfortunately, scams may offer impossible promises like immediate loan forgiveness or may trick student loan borrowers into disclosing personal information.

Types of Student Loan Scams

Student loan scams can take many forms. Be wary of scams that come in the form of unsolicited calls, texts, or emails.

Student Loan Forgiveness Scam Calls

If you receive an unsolicited call asking you for information about your student loans, pay close attention. Some calls may present opportunities to cancel student loan debt. In general, any call offering a fast solution to pay off your student loans is a scam. The U.S. Department of Education offers legitimate forgiveness programs and opportunities to lower your student loan payments, all of which can be accessed at no cost to borrowers directly through their loan servicers.

The Federal Trade Commission (FTC) has a sample of what these calls might sound like, so you can be prepared.

Student Loan Forgiveness Text Scam

Texting is another avenue for scammers to contact student loan borrowers. These communications might include the need to “act immediately” or tout enrollment for debt relief is taking place on a first-come first-served in order to inspire a false sense of urgency.

Text scams are newer on the scamming spectrum, so consumers may not be expecting them. Instead of responding to the message, call your student loan servicer on the number listed on their website. In general, most student loan servicers will not conduct business via text messages.

Spotting Student Loan Scams

When it comes to student loan scams, the short rule of thumb is that anything that sounds too good to be true, probably is. For example, if a company claims that with an up-front fee that your loans will automatically be forgiven, it is a scam. No program exists where loans are “automatically” forgiven for a fee.

If you have a feeling that you might be getting scammed, do a thorough internet search for the company. More than likely, someone else has been in contact with, and possibly taken advantage of by, this company.

The problem with relying on an internet search to look for a scam? Not every scam will have been identified through an internet search, as they change their names and phone numbers often to avoid the background research a consumer might conduct. Here are a few common techniques used by student loan scammers.

Upfront Cost & Fees

Any student loan company offering to help you for an upfront fee is a scam. According to the FTC, it is illegal for companies to charge you before providing assistance. And importantly, borrowers can get help directly from their student loan servicer or Department of Education at no cost.

Immediate Student Loan Forgiveness

Another huge red flag — organizations offering to provide immediate or complete student loan forgiveness. Most government loan forgiveness programs require a record of qualifying payments and or employment certifications depending on the program.

Requesting Passwords

Broadly speaking, legitimate companies won’t ask you to verify personal details out of the blue. If you receive a call, email, or text asking you to disclose your passwords or any other sensitive personal information, think twice before responding. Sharing personal details could allow scammers to access your loan information, or other important accounts.

Avoiding Student Loan Scams

Attention to detail and diligence in communication can help you avoid some common student loan scams. Here are eight student loan scams to avoid.

1. A Promise of Immediate Forgiveness

Beware of any promise that seems too good to be true. Student loan forgiveness takes time, period. A company can only help you fill out paperwork for a forgiveness program; they cannot forgive your loans.

2. A Request for an Upfront Fee

Many scams rely on obtaining an upfront fee for something that either cannot be done (immediate loan forgiveness) or something that can be done for free, online (apply for a loan forgiveness program). You should only agree to payment once the company has completed the service in question.

3. Private Loan Refinancing

In general, only federal loans are eligible for loan forgiveness programs. Be cautious of any company that tells you that they can get your private loans forgiven. Private loans don’t typically offer forgiveness programs.

4. A Phone Call

Many scams start with a student loan forgiveness call. The Department of Education, who directs federal loan forgiveness programs, will never call you. If they need to correspond with you, they will by mail.

5. A Request to Pay Them and Not Your Lender

No company will ever make your student loan payments for you. You can pay them for a service, sure. But it is unwise to make your student loan payments to anyone except for who you owe.

6. A Request to Stop Making Student Loan Payments

No legit company will ever recommend you stop making your loan payments. A company working in your best interest will advise you to make all of your payments on the correct repayment plan so that you’re sure to qualify for any applicable loan forgiveness programs.

7. Asking for Your FSA ID

No one should ever ask for your Federal Student Aid ID. Your FSA ID allows you to log onto the government website where borrowers manage their federal student loans.

8. Official-Looking Insignias

Fraudsters do a good job of making their websites, seals, and paperwork look like official government branding. Just because something looks official does not mean it is official, so do your research.

Reporting Student Loan Scams

If you encounter any student loan scams, you can have a few different options for reporting them. You can report scams to the Department of Education through the Federal Student Aid website .

You can also report the business conducting the student loan scam to the Consumer Financial Protection Bureau . Anyone who has been contacted by what they believe to be a scam can also report it to the
FTC .

Looking for Safe Private Student Loans?

Not everyone qualifies for loan forgiveness. Others may not actually find that it makes the most sense for their own personal financial situation. (This may be especially true for loan forgiveness programs that require you to pay taxes on the forgiven balance, such as income-driven repayment.)

Those looking for a safe borrowing option may want to consider SoFi. Private student loans from SoFi have no fees and are available to undergraduate, graduate, and professional students, or their parents.

The Takeaway

Student loan scams rely on the borrower’s lack of understanding on how their loans, and loan forgiveness program works. Pay attention to texts, emails, or phone calls that over-promise on their ability to lower your monthly payments or have loans forgiven, as these are generally indicators that there is a scam, or other unfavorable business going on. If you have any doubt, contact your loan servicer directly to avoid falling into a scammer’s trap.

No matter what path you take with your student loans, always be sure to do adequate research. It’s hard to scam someone that understands their loans, and their options for repaying them.

Interested in learning more about paying for college with a private student loan? Get a rate quote from SoFi for free in just a few minutes.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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It’s been more than a decade since the Great Recession. Remember how it brought multibillion-dollar financial corporations to their knees and nearly chased the big American automakers right out of Detroit?

Instead, both industries got a bailout, to the tune of $634 billion, according to ProPublica’s Bailout Tracker.

So if the giants of capitalism got a pass, will the students paying loans to get a bailout as well? Will there be a student debt cancellation plan for you and your former classmates?

A Rising Tide of Student Loan Debt

When you earned your degree, you also most likely earned your way into a not-so-exclusive club. Forty-five million people owe $1.73 trillion in student loans in America. For comparison, that’s $740 billion higher than the outstanding credit card debt in the country.

Student loan borrowers owed about $845 billion in late 2010. This means that in the past decade, student debt has grown by over 100%.

How Many Would Benefit From a Bailout?

Forgiving just $10,000 per person would wipe away the federal student loan debt of 15.3 million borrowers, Insider reported.

Proponents of student loan cancellation say a bailout would:

•  Minimize the wealth gap

•  Inspire the creation of small businesses

•  Encourage homeownership

•  Help people feel more confident starting families

Here are two more things backers argue that student loan forgiveness would do.

Spark an Economic Upswing

Bharat Ramamurti, a member of the COVID-19 Congressional Oversight Commission, tweeted what he sees as benefits of student loan forgiveness: “Broad student loan debt cancellation via executive order is good economics and politics.”

He added, “One study has found that canceling all debt would have a big stimulative effect. Of course, the impact would be less if less debt were canceled, but debt cancellation is one of the relatively few ways to stimulate the economy without Congress.”

Benefit All Federal Student Loan Borrowers

Upper-income households owe almost 60% of the outstanding education debt and make almost three-quarters of the payments, the Brookings Institution noted. Lowell Ricketts, a lead analyst for the Center for Household Financial Stability at the St. Louis Fed, agreed that loan forgiveness would disproportionately benefit affluent graduates .

But he pointed out that forgiving $10,000 of student debt would help many low-balance borrowers as well and resolve the problem of overdue payments that 19% of that group has.

The Price of Student Loan Debt Cancellation

While it might sound like a good idea in the face of high debt balances and delayed dreams, one reason it might not come to fruition is the price tag.

Erasure of $10,000 for all 43 million borrowers would cost $377 billion . Canceling $50,000 for all 43 million would cost over $1 trillion, according to The Conversation, which publishes pieces by academics well-versed in these areas.

Additionally, the optics of a student loan cancellation aren’t necessarily good. For example, law and dental school grads may have high debt balances but also might start lucrative careers immediately.

The issue of wiping out student loan debt may have another fairness factor. Former students who successfully paid off their loans may not appreciate seeing millions of current borrowers let off the hook.

And while you can default on a mortgage or get rid of most credit card debt by filing for bankruptcy, most student loans are owned by the federal government, and are extremely difficult to get discharged except for all but the most extreme circumstances.

Student Loan Cancellation FAQ

Q: Did the Stimulus Bill Forgive Student Loans?

A: No. The $1.9 trillion coronavirus relief bill passed in March 2021 doesn’t forgive student loans, but the legislation does mention them: Any federal or private student loan balance that’s forgiven will be tax-free through 2025.

Before the bill, participants of the Public Service Loan Forgiveness (PSLF) Program and income-driven repayment plans were required to pay taxes on any remaining loan balance that was forgiven.

With this change, borrowers who receive any loan forgiveness before Jan. 1, 2026, won’t have to pay taxes on the forgiven loan amount.

It’s unclear if private student loan borrowers will see any gain. Since the only options for repayment aid are refinancing and deferment or forbearance (if offered by the lender), they may not benefit from this bill. However, there has been some buzz about the Biden administration helping private student loan borrowers more.

Q: Are Student Loans Being Forgiven?

A: President Joe Biden had vocalized his support of $10,000 in student loan forgiveness but has not acted on it. The future of student loan forgiveness is still up in the air, as of this writing.

Q: Will They Take Away Stimulus Money for Student Loan Borrowers?

A: Collection agencies can seize stimulus payments for defaulted student loans in some cases.

Paying Down Your Student Loans

Even without a student loan bailout plan, options exist for dealing with your debt.

Federal and Other Programs

If you work in a qualifying public service field or as a teacher and you have federal student loans, you may be able to qualify for the Public Service Loan Forgiveness (PSLF) Program, which is supposed to forgive any remaining loan balance after 120 qualifying monthly payments. Unfortunately, the pool of people qualifying for loan forgiveness has been small.

Specific state and federal loan forgiveness options exist for health care professionals, veterinarians, lawyers, and teachers who work in underserved areas of the country.

In addition to the forgiveness options, qualified federal student loan borrowers may be able to take advantage of delayed payments .

Another way some borrowers seek to ease student loan debt is through income-driven repayment plans. The amount you pay is based on your family size and income, usually 10% of your discretionary income. It’s intended to make the monthly payments more affordable by stretching out the repayment term, which usually results in more interest accumulating over the now-longer life of the loan.

Refinancing

If you refinance your student loans with a private lender, you may qualify for a lower interest rate, which could shave off a significant sum over the life of your loans.

Some lenders refinance both private and federal student loans.

If you decide to refinance, you’ll typically have a choice between a fixed or variable rate, both of which carry their own risks and rewards. A fixed-rate stays the same for the life of the loan, so you always know what your monthly payment will be.

Variable-rate loans can fluctuate as the economy roars or slumps. They’re usually tied to a well-known index, so your payment amount may fluctuate over time. The potential benefit, however, is that initially, the variable rate is sometimes lower than the fixed rate.

You may also have term options if you refinance your student loans. You can shorten your loan term, which can help get you out of debt faster or extend your term, which could ideally lower your monthly payment but, again, means more interest accrues over the life of your loan.

Just know that if you’re refinancing your federal loans into private loans, you’ll be giving up federal benefits and protections such as federal deferral, forgiveness options, and income-driven repayment plans.

Recommended: Student Loan Refinancing Calculator

The Takeaway

Question marks swirl around student debt cancellation. Amid all the noise about the topic, it may be a good idea to take measures of your student loan rates and terms and plot a smart course.

Given up on the idea of a student loan bailout? Check your rate on refinancing your student loans with SoFi.

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SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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