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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.

SoFi Private Student Loans
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.

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).

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It isn’t unusual for college students and graduates to be in debt due to education-related borrowing. Nearly half of adults under the age of 30 took on some student loan debt in 2019, according to a Federal Reserve report , with the typical amount being between $20,000 and $24,999. As for the overall amount of student loan debt in the United States, the dollar figure is now more than a staggering $1.7 trillion.

Because of this student loan crisis, the idea of having part or all of this student loan debt forgiven would naturally sound attractive to many of these borrowers, allowing them to spend their hard-earned dollars in other ways. This post will share facts and myths about student loan forgiveness, along with information about how forgiven student loan debt can affect a person’s income tax bill and, finally, the role that the 1099-C student loan forgiveness form plays.

Here’s a high-level look at the 1099-C student loan forgiveness form. This income tax document lists how much debt, dollar-wise, was forgiven in that tax year—and the IRS will also receive a copy. Why? Some student loan debt that’s forgiven is also considered to be taxable income.

Recommended: 7 Facts You Didn’t Know About Student Loan Debt

Student Loan Forgiveness

This is a subject where plenty of facts, myths, and half-truths exist. Part of the confusion may have arisen when the Student Loan Forgiveness Act (SLFA) was introduced in Congress in 2012 to help borrowers pay down their debt.

This Act proposed an interest rate cap on student loans, along with a repayment plan that would allow borrowers to have their loan balance forgiven after ten years if the payments they made equaled 10% of their adjusted gross income.

Students who found employment in public service jobs could have their balances forgiven after five years, rather than ten. This Act, though, never made it out of committee.

In May 2020, the House of Representatives passed the HEROES Act (although it wasn’t addressed by the Senate). The Act debated in the House would allow for $10,000 in forgiveness in federal student loans and $10,000 in private student loans per student, reduced from the initial proposal that called for $30,000 in forgiveness—but then the Act was further watered down to only provide this option to students who were struggling financially.

On October 1, 2020, the House passed a modified version of this bill, but it has not yet been addressed by the Senate.

The American Rescue Plan, which passed in March 2021, did include some provisions regarding student loan forgiveness. These provisions state that all forgiven student loans will be forgiven tax-free through December 2025.

Existing Options for Federal Student Loan Forgiveness

There are some options for borrowers to receive forgiveness on federal student loans. These forgiveness options include:

•   Income-Driven Repayment Plans: The U.S. government offers four types of income-driven repayment plans where the remaining balance could be forgiven after 20 to 25 years if requirements are met. Requirements include paying designated amounts on time.
•   Public Service Loan Forgiveness: Under this program, borrowers who work for a qualifying non-profit agency, governmental organization, or public interest employers can get their loans forgiven after ten years. They must make 120 payments based on their income to qualify. The amount forgiven under this plan is not considered taxable income by the IRS.
•   Teacher Loan Forgiveness Program: Qualifying teachers, after five years of teaching full-time, can get up to $17,500 of their federal loans forgiven. To qualify for the full amount, they need to teach math or science at the secondary level, or special education at the elementary or secondary level. Otherwise, they may still qualify for $5,000 in forgiveness.
•   NURSE Corps Loan Repayment Plan: This program can pay up to 85% of eligible borrowers’ unpaid nursing school debt. To qualify, they must work for two years in a critical shortage facility or as a nursing faculty member at an accredited school. After two years, 60% of student loan debt can be forgiven. If qualifying for another year, then an additional 25% of the debt can be forgiven.
•   Indian Health Services’ Loan Repayment Program: This program will repay up to $40,000 for qualifying doctors, nurses, dentists, psychologists, and other healthcare professionals working for two years in facilities that serve American Indian or Alaskan Native communities. Contracts can continue to be renewed beyond the initial two years until the loan debt is fully paid off, and other professionals—such as environmental engineers and social workers—may qualify.
•   The National Health Service Corps: Medical, dental, and mental health professionals who work for two years in underserved areas can qualify for up to $50,000 in loan repayment forgiveness. Typically, it’s the federal loans that qualify.

There is plenty of discussions right now about forgiving student loans in additional ways, so it’s possible that forgiveness programs may be expanded under the new administration. It’s hard to predict right now.

There certainly is support for the idea of forgiving all student loans, with more than half of Americans (54%) agreeing that this debt is a “major problem” in the United States. When looking at registered voters, 58% of them say they’d support a plan that got rid of existing student loan debt—and to also make public colleges and universities, along with trade schools, tuition-free.

When it comes to private student loans, these loans can seldom be forgiven except under the direst of circumstances, such as when the borrower becomes completely disabled or dies.

Recommended: Understanding Private Student Loan Forgiveness Options

1099-C: Cancellation of Debt (Student Loans!)

When a borrower gets student loan debt forgiven, tax consequences should be investigated and, as with any tax-related question, it’s best to consult with an accountant or tax attorney.

Programs that require borrowers to serve in high-need areas or in public service can provide forgiveness of debt that’s tax-free. Current examples of tax-free forgiveness include Public Service Loan Forgiveness, Teacher Loan Forgiveness, and the National Health Service Corps Loan Repayment Program. Forgiveness under income-driven repayment plans is generally taxable.

The tax season after a borrower receives student loan forgiveness, they’ll likely receive a 1099-C form. This will list how much debt was forgiven in Box 2, so check to make sure it matches your records and then verify whether income taxes will be owed on this amount.

Some borrowers who will see tax consequences for forgiven student loan amounts may be pushed into a higher tax bracket. If this occurs, they will need to deal with a double whammy: more taxable income at a higher bracket.

In some cases, this will make it difficult for the borrower to pay the amount of income taxes owed for that year. Some may decide to put the amount on a credit card or take out a personal loan, while others negotiate with the IRS or set up a payment plan with the agency.

The Takeaway

Federal student loans come with benefits not available through private student loans, including the forgiveness programs like those offered by Public Service Loan Forgiveness or income-driven repayment plans. When federal student loans are refinanced, the borrower can’t benefit from the forgiveness programs anymore.

If you’re thinking about refinancing student loans, it may make sense to explore what’s available at SoFi. Check out this information about student loan refinancing while the ongoing relief due to COVID-19 is in effect and what can make sense (short answer: refinancing federal loans might not be the thing to do right now, but it could make sense to explore refinancing private student loans through SoFi).

SoFi offers competitive rates with no fees and, if and when the time is right, you can refinance your federal student loans with your private student loans, something that many financial institutions simply won’t do. Plus, it’s quick, easy, and convenient to apply online.

IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS, PLEASE BE AWARE THAT THE WHITE HOUSE HAS ANNOUNCED UP TO $20,000 OF STUDENT LOAN FORGIVENESS FOR PELL GRANT RECIPIENTS AND $10,000 FOR QUALIFYING BORROWERS WHOSE STUDENT LOANS ARE FEDERALLY HELD. ADDITIONALLY, THE FEDERAL STUDENT LOAN PAYMENT PAUSE AND INTEREST HOLIDAY HAS BEEN EXTENDED TO DEC. 31, 2022. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE THE AMOUNT OR PORTION OF YOUR FEDERAL STUDENT DEBT THAT YOU REFINANCE WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.

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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.