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How to Apply for Student Loans: Info for Aspiring College Students

Many college students receive some sort of monetary aid to help cover the cost of postsecondary education. The application process can be completed entirely online and requires students to submit a series of personal documents.

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Let's discuss how to apply for federal student loans, which are generally considered the first option prior to seeking private student loans. In order to apply for federal loans, students need to fill out the FAFSA form, which is submitted to determine loan eligibility and amounts.

Student Loan Application Overview

Unlike grants and scholarships, student loans aren't gifts; loan packages need to be entirely paid back over time with interest. Students may begin the loan application process by going to the U.S. Department of Education's financial aid website, where the Free Application for Financial Student Aid (FAFSA) is located.

Most 2- and 4-year schools use the FAFSA to determine students' eligibility for financial aid. Many counselors recommend aspiring college students fill it out whether or not they believe they're eligible for student loans. Questions listed on the site help students figure out how much money they likely need to attend school, based on their schools of choice.

Student Loan Eligibility

Aspiring college students need to meet specific requirements to be recipients of federal student aid. Prerequisites include, but aren't limited to:

  • Holding a high school diploma or equivalency
  • Having a social security number
  • Being enrolled in or accepted to an eligible degree program
  • Being registered with the Selective Service (only for males age 18 to 25)

Filling Out the FAFSA

The FAFSA form asks students many questions about their financial situation. Prior to filling out the FAFSA, aspiring students need to gather their records or their parents' records of income. These records should not be mailed but kept handy when filling out the online FAFSA:

  • Driver's license
  • Social security number
  • Current bank statements
  • Recent income tax returns
  • Investment records

Filing a FAFSA requires the collection of signatures, because the application isn't considered complete until it's been signed by the necessary parties. This part of the process is fastest when done electronically, but students may choose to complete it by mail. The electronic option involves a Federal Student Aid ID (FSA ID), made up of a username and password. Students may create their FSA ID online and re-use it every year.

Types of Loans

Interest payment and deferment options vary between different kinds of loans. The amount of financial need a student can demonstrate determines which kind of student loan they receive. Different types of federal student loans include:

  • Stafford Loans
  • Perkins loans
  • Direct PLUS loans
  • Direct Consolidation loans
  • Direct subsidized loans
  • Direct unsubsidized loans

Loan Amounts

The amount of aid for which a student is eligible depends on the student's financial need. It is calculated by measuring the difference between the student's expected family contribution and the overall cost of attending a particular institution. The expected family contribution is calculated based on the data entered into the FAFSA. Cost of attendance encompasses a wide range of possible expenses, including:

  • Tuition
  • Room and board
  • Books and supplies
  • Transportation
  • Dependent care

By filling out the FAFSA, students provide the federal government with the necessary information to offer various types of student loans.

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