How to Apply for Student Loans

Borrowing money to pay for education is a fact of life for most college students. Of the 20.5 million students attending college in 2016, The College Board estimates 34 percent — approximately 6.97 million people — took out some form of federal loan to help pay for their education. The Institute for College Access and Success reports that 68 percent of college seniors graduated with student loan debt.

A student loan is money you borrow for school that must be repaid with interest, according to the U.S. Department of Education. That might sound simple on the surface, but once you dig a little deeper you’ll discover there’s a lot of information to sift through and understand before you can determine the process for how to apply for student loans. Whether you’re interested in Federal Student Aid or private student loans, these steps will help smooth out the process when it comes time to apply for a loan.

Steps to Apply for a Student Loan

The process for applying for student loans can take some time, but understanding the necessary steps can help you be more efficient. Here are the steps you need to take to apply for school loans:

1. Determine Your Need

When trying to determine how to pay for college, remember there are more expenses than just tuition. Figure out how much you’ll need to borrow by researching the total cost of getting your degree.

Include the estimated cost of the necessary expenses, such as:

• Books and supplies
• Tuition and fees
• Room and board
• Transportation
• Other personal expenses

Consider how much money you have available to pay for these expenses, including any contributions from your parents. That amount is your expected family contribution. Subtract your EFC from your anticipated expenses to determine how much extra you’ll need to cover the cost of your college education.

Find Out: The Average Student Loan Debt in Every State

2. Apply for FAFSA

The first step in applying for financial aid at most colleges and universities is filling out the Free Application for Federal Student Aid. FAFSA is the key that unlocks access to $150 billion in federal grants, work-study funds, and loans each year, and it’s used by many state and private colleges to determine eligibility for aid. Grants and work-study funds don’t require repayment, and can significantly reduce the amount of money you need to borrow to fund your education.

3. Decide Which Type of Loan Is Best for You

Your FAFSA results will determine which loans you qualify for. You might find you’re eligible for one or more of the following:

• Subsidized Stafford loans: Need-based loans that the government pays interest on while the student is in school and until repayment begins
• Unsubsidized Stafford loans: Loans not based on income and which students are responsible for repaying interest on
• Perkins loans: Offered in cases of extraordinary need, in which the school, not the federal government, is the lender

Before deciding on the type and amount of loan to take, consider how you’re going to pay it back. Ask about any available student loan forgiveness plans that might be available, and make a plan for student loan repayment that won’t put you in a financial bind once your loan payments become active.

4. Meet With Your School’s Financial Aid Office

Your completed FAFSA will tell you what federal financial aid, including student loans, you qualify for. But your college or university’s financial aid office is responsible for helping students apply for and receive student loans, grants, scholarships and other types of financial aid. Your financial aid officer can provide information about additional scholarships, grants, private student loans, and aid that’s school- or state-specific.

Related: 10 Best Private Student Loans

Documents You Need to Apply for Student Loans

You’ll need to gather some basic information and documents before filling out FAFSA. Be prepared to complete your form with the following details:

• Your Social Security number or alien registration number
• Your most recent federal income tax returns, W-2s, and other records of money earned
• Bank statements and records of investments
• Records of untaxed income

If you’re a dependent student you’ll need to provide the same information from your parents.

If you’re applying for private student loans from a bank or third-party lender, you’ll need additional documentation to meet the lender’s requirements, such as a driver’s license to prove your identity and paycheck stubs to verify your employment history.

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A student loan can be a valid investment in your future, but as with any loan, you must calculate the cost before signing on the dotted line. Federal student loans generally offer additional benefits of lower interest rates, no credit checks, no repayment of loans while you’re in school and flexible repayment plans.

But at its core, a student loan is still a loan. It’s borrowed money that must be repaid with interest. When you have a repayment plan in mind before you sign for a loan, you can help prevent excess financial stress once that monthly student loan payment becomes due.

Check Out: Student Loan Providers Comparison