Qualifying for Student Loans Doesn’t Have to be Difficult
 Contrary to common belief, just about everyone can qualify for some sort of student loan. Indeed, some college students may be amazed at how much they can actually qualify for – whether from private lending or through government-funded financial aid.
However, before you start filling out loan applications, you need to spend time coming up with a realistic estimate of how much money you’ll actually need. Remember, a loan has to be repaid eventually, and there’s no point in accumulating more debt than necessary.
In order to qualify for just about any type of student loan you must be a U.S. citizen or at least be able to prove permanent residency. In addition, you need to attend school at least half-time. While your eligibility for a specific type of loan can vary, you will qualify regardless of your parent’s income level.
The first thing you need to do is determine what types of federally subsidized programs are available to you by completing a Federal Student Aid (FAFSA) application. This is a free application process that determines the student aid programs you may qualify for. It can also be used to determine whether or not students qualify for many private scholarship or grant programs.
Once you’ve submitted your completed FAFSA, you’ll receive a Student Aid Report (SAR) within about four weeks. Review this report carefully and make corrections as needed. If there are errors, send corrections to the address indicated on the report as soon as possible because the contents of this report plays a big role in the aid for which you qualify.
Know Your Options
Government student loans are known as Stafford Loans and should be applied for before pursuing private funding. There are Unsubsidized Stafford Loans which are not based on any particular need and do not require a co-signer. These loans begin to accrue interest on the date the funds are disbursed.
On the other hand Federal Subsidized Stafford Loans require that certain criteria be met as defined by the federal government, including demonstrating financial need. With subsidized loans, you don’t accrue interest on the principal borrowed until six months following graduation.
Private lending institutions also provide student loans. The big difference is that credit history will play a much larger role in whether or not you qualify, how much you qualify for and what interest rate you’ll be charged.
As a general rule, the following criteria need to be met to qualify for a student loan from a private entity:
- A minimum of two years of employment history
- Proof of income
- A positive credit history that is at is at least 21 months in length
- U.S. citizenship or permanent residency of the United States that includes actually living in the country for the previous 24 months.
In most cases, students can qualify for more money and better rates with a cosigner.
A few tips
- Build your credit history so you can qualify for the most money at the lowest rates, which will lower the overall cost of your loans. You can easily do this by applying for a credit card and using it to make purchases that you can immediately pay off. If at all possible, do not keep a balance on your credit card.
- Apply for Federal Student Aid (FAFSA) as early as possible. Government student loan programs work on a first-come, first served basis.
- Be very careful about the website address you type in when looking for FAFSA information. Make sure you end up on www.fafsa.ed.gov. There is a website using the URL www.fafsa.com that charges fees that are completely unnecessary for receiving student loans.
- Beware of student loan scams, as well as any program that requires a fee for application or help searching for financial aid. These types of programs are actually illegal and will certainly be a waste of your money.
- Carefully review the loan terms and payment schedule and be sure you can meet the obligations before you sign any legally binding documents. If you have any doubts about your ability to adhere to the agreement, don’t sign.
Further Reading:
Financial Aid Resource Publications
Federal Direct Loans
Get Help Paying for College
Related posts:
- How to Finance an MBA
- MBA Schools: Financial Aid Concerns
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