How to Apply for Student Loans (Federal & Private)

Free financial aid doesn’t always cover what it takes to go to college. For most people, applying for student loans is part of the college experience. However, applying for loans doesn’t have to be complicated.

If you know what your options are ahead of time, it will help you make an informed decision that sets you up for financial success in the future.

So, how do you know where to begin? Let’s start with the different student loans available to you.

Types of Student Loans

There are two types of student loans — federal and private. 

Federal Student Loans

Federal student loans are designed for undergraduate and grad students, depending on financial needs.

There are two primary federal student loans for traditional students:

Direct Subsidized Loans — This loan is for undergraduate students that need additional assistance. These are great loans while you’re in school as you do not accrue any interest until after you graduate. Additionally, you get a six-month grace period after graduation before you have to start paying them back. It is subject to a borrowing limit.

Direct Unsubsidized Student Loans — This loan is for graduates and undergraduate students. Unsubsidized loans are open to most students and do not require that they demonstrate financial need. Therefore, there is no grace period, and interest accrues while you’re in school.  The amount is subject to a borrowing limit.

Additionally, there is one federal student loan geared towards grad students.

Grad PLUS Loans — This loan was created to allow graduate and professional students an opportunity to borrow federal loans at a low interest rate. It does not have a borrowing limit, but it does require that you have decent credit or a co-signer. 

Each of these loans comes with its own restrictions and rules. You can learn more about the various student loans in our guide. 

Private Student Loans

Private student loans are more challenging to secure for students who haven’t built up credit.

Private loans are typically provided by large financial institutions that are looking for borrowers with a flawless borrowing history as well as a good debt-to-income ratio. 

Interest rates, borrowing limits, and repayment plans vary by each lender.

Applying for Federal Student Loans

Now that you know what options you have, you can start applying for student loans.

To start, apply for the Free Application for Federal Student Aid (FAFSA®) which will automatically consider you for any of the federal loans. 

  • Step 1 – File rapidly here on Frank or We have a FAFSA® guide for everyone that will help you through the process.
  • Step 2 – Submit your application before the October 1st deadline. Remember that the earlier you file, the more money you’re likely to get.
  • Step 3 – Look out for your Aid Award Letter, which will tell you how much you’ve received in federal loans.
  • Step 4 – Accept your loan options if you feel that you need them to cover the aid gap.
  • Step 5 – Complete your FAFSA® every school year to ensure you continue getting loan options.

Federal Loans are the best option for closing the aid gap because of their interest rates and repayment options. However, sometimes even federal loans aren’t enough to help out. In that case, you might want to consider applying for a private loan. 

Applying for Private Student Loans

The process for private student loans will differ depending on what lender you go through. However, here’s a look at the standard application flow.

  • Step 1 – Go to your chosen lender’s website.
  • Step 2 – Research information on the interest rate, repayment flexibility and rules, and what is required for approval.
  • Step 3 – Apply via their website. 
  • At this point, you may be asked to choose your repayment plan and interest rate. Keep in mind most private loans have a strict repayment schedule and you should make sure it’s something you’ll be able to afford.
  • Step 4 – Add a co-signer, if necessary. If you have little or no credit, you will likely need a co-signer for approval.
  • Step 5 – You and your cosigner’s credit will be checked by the lender & they will let you know the decision either immediately or via mail.
  • Step 6 – If you are approved, you will need to sign your documents consenting to the conditions of the loan.

Private student loans are a great option if you need to close the aid gap to complete college. However, they come with strict repayment schedules compared to federal loans, so be prepared to build that into your budget. 

How long does it take to get your loan money?

The payment schedule for each loan varies. Federal loans typically go through your school first and, if there is money left over, your school will distribute the remaining amount to you.

For private loans, the timeline depends on the lender, but they will likely direct deposit the amount into the bank account you provided them.

Applying for student loans is a simple process, but understanding the pros and cons of each loan is incredibly important. These are large sums of money that you’ll be paying off for a while, so make sure it’s the right decision for you.