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How to Apply for Private and Federal School Loans

Receiving a college education may be the single most important accomplishment that one may achieve in their entire life time.

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Tuition is only one of the many expenses you can expect to encounter as a college student. You must also pay for books, housing and your day to day expenses if you choose to live away from home. Unfortunately, financial aid, scholarships and savings may not cover the total cost of your higher education. If you need additional help paying for college, you can apply for federal and private education loans to help offset your expenses.

Federal Student Loans

Federal student loans are offered by the U.S. government. Depending on the loan program your school participates in, your federal student loan may come directly from the federal government or be offered to you through a government-approved private lender. Your school may either participate in the Direct loan program or the FFEL (Family First Education Loan) program, which offers Stafford loans. Although both are federal loans, you may not receive both types of loan from the same college or university

To apply, visit to complete a Free Application for Federal Student Aid (FAFSA). Regardless of whether you qualify for financial aid, filling out a FAFSA is necessary to determine your federal student loan eligibility. You may print out the FAFSA, fill it out and mail it, or fill out the FAFSA online and submit it electronically. Have your most recent W-2, your spouse’s W-2 (if you’re married), or your parents’ W-2s (if you are still a dependant) handy before you begin. You do not need to fill out a formal loan application for a federal student loan. Your FAFSA serves as your loan application.

Wait to receive an award letter from your college’s financial aid department. You will get an award letter even if you are not eligible for financial aid. This letter is merely a statement of what forms of financial aid you are eligible to receive. If you qualify for a federal student loan, this information will be included in your award letter. Once you receive your approval letter, visit your school’s financial aid office and undergo entrance counseling. Entrance counseling is an online counseling session required of all federal student loan recipients to ensure that they understand their repayment responsibilities.

After you complete entrance counseling, your financial aid office will provide you with a promissory note to sign. The promissory note merely states that you understand the loan terms and agree to repay your loan. Your school’s financial aid office will then submit your signed promissory note and notify you when your education loan funds become available.

Private Student Loans

Before you begin shopping for a private student loan, check your credit rating. Unlike federal student loans, private student loans often require a credit check. If you do not have an established credit history, you may need to ask a family member to co-sign with you before a private lender will approve your loan application.

Visit local banks and credit unions and inquire about their private student loan programs. Most major banks offer private student loans. Online lenders may also offer competitive low rates. Keep in mind that a private student loan isn’t much different from a personal loan. If you can’t find a private education loan with terms that suit your needs, look into personal loans.

Apply for the loan by filling out a loan application with the bank or credit union you choose to service your loan. The length of time it will take to obtain a loan approval depends upon your lender’s policies. Before a private student loan lender will extend a private loan to you, your school must certify the loan. This is merely a formality by which the school verifies to the lender that you are currently enrolled. Unless you opted to use a personal loan as a private student loan, your lender will send the student loan funds to your school’s financial aid office.

If you don’t qualify for financial aid or you have already exhausted your financial aid options, federal and private student loans can help you pay for an education that would otherwise be unattainable. Keep in mind, however, that you must repay the full loan amount plus any interest that accrues on the balance of the loan from the time you borrow until your repayment period begins.