What Are Student Loans and How Do I Apply for One?

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If you’re a prospective student looking to pursue a college degree, you may be wondering how you’re going to pay for it. With tuition rates higher than they’ve ever been, it’s important to understand all your options for financial aid and student loans.

A student loan is either be granted by private or federal lending institutions and usually comes with relatively low interest rates. However, it is important to understand the many options available to you and how you can apply for one.

In this article, you can learn more about what a student loan is as well as what the application process will look like.

What Is a Student Loan?

Student loans are funds that are granted to individuals in order to pay for tuition and other expenses associated with higher education.

When shopping around for loans, most students are best served by finding federal student loans because they typically have better repayment terms along with lower interest rates when compared to private lenders.

In most cases, federal loans will cover the entire cost of tuition as well as student housing, books, and food. Because they carry a more manageable interest rate of around 4-6% annually, federal loans are the most realistic option for most students looking to get their degree.

Some individuals may choose to seek funds from a private lender if they need to cover any other costs that are not covered by a federal loan. However, it is generally recommended that new students exhaust all their potential federal funding options before taking on a private loan.

It’s important to note that the process is different for acquiring a federal loan compared to a private loan.

How to Apply for a Federal Student Loan

The sooner you apply for a student loan, the better off you will be. Because federal student loans are granted on a first-come, first-served basis, you will have the best chance of getting financial aid if you apply as soon as possible.

This process may be a bit overwhelming if it is your first time applying for financial aid. To get you started, here’s a step-by-step breakdown of the application process.

Step 1: Collect all the Necessary Financial Documentation for Your Application

To get access to federal financial aid, you’ll need to fill out the Free Application for Federal Student Aid, also known as the FAFSA.

The FAFSA is released every year in October. Students looking to get access to financial aid will need to apply the year before they plan on attending school and will need to reapply each year throughout the course of their studies.

Because the form contains a lot of information, students who want to get a head start on the process should begin in September. This ensures that you’ll have everything organized by the time the application is available.

Here’s an overview of what information you or your parents will need to have ready for the FAFSA:

  • Federal Student Aid ID
  • Driver’s license number (optional)
  • Social Security Number or Alien Registration Number
  • Federal income tax returns and any records of untaxed earnings, including private financial aid
  • Bank Statements and Investment Account Statements
  • A list of the ten schools you would like your FAFSA submitted to

While you may think you don’t need to use your parents’ information on the FAFSA, this might not be the case. Even if your parents don’t plan on helping you pay for college, or if you live on your own, you might still be required to provide their information.

Step 2: Use These Forms to Apply for Student Loans and Free Aid

Having gone over the application process for FAFSA, it should be noted that this application is the only way in which you can apply for federal aid. Students who failed to fill out the FAFSA will not be eligible for any federal student aid to cover college expenses.

This makes filling out that application crucial if you’re looking to take advantage of the low-interest rate student loans that the government offers. However, there is also another form you can fill out that can get you supplemental aid from the college or university that can be added on to your federal aid.

Information on the CSS Profile

This form is called the CSS Profile, and it helps students get access to individual aid from specific colleges. Those who are interested can fill this out to see if the colleges they wish to attend will offer additional aid to supplement what you will already receive from the federal government.

The CSS Profile also unlocks access to grants in addition to loans. Because of this, institutions that offer supplemental aid can allow you to take out fewer student loans which will reduce the total amount of debt you have to pay back.

We would be remiss not to mention, however, that the CSS Profile isn’t free. To fill out this form, there is an initial $25 fee in addition to a $16 fee for every school that is added to the list.

One of the major advantages of filling out a CSS Profile is that it can open up the door to colleges that might have been too expensive before finding out that they can offer supplemental aid. With that in mind, this form could save prospective students a lot of money and allow them to attend a more expensive school without having to pay full price.

Check out this article from Student Loan Hero to get all the details and a list of schools that use the CSS Profile here: The CSS Profile: How to Receive More College Aid.

Step 3: Fill Out the FAFSA and CSS Profile Applications Online

When the time to apply for financial aid comes, you will be best served by filling out your FAFSA and CSS Profile online. You and your parents can register for access to the FAFSA through the Federal Student Aid website.

After registering, you can fill out the entire FAFSA online and have the ability to edit the information later if you need to. Additionally, FAFSA has a mobile app that allows prospective students to apply for aid.

This online application also offers an IRS data retrieval tool that can speed up the process by allowing you to autofill all the necessary financial information. This can save time, but it doesn’t hurt to be over-prepared. Try to collect as much documentation in advance just in case you run into any problems using this tool.

Step 4: Review Your Student Aid Report

Once you’ve filled out your FAFSA application, you’ll receive a Student Aid Report, which summarizes all the information you’ve provided. You should receive this report in three days to three weeks.

Once you get it, it is crucial to review that all the information is accurate. If it isn’t, you will need to edit your FAFSA as soon as possible. Because federal aid is granted on a first-come, first-served basis, it is important not to delay correcting any errors that come up on your FAFSA.

One other important thing to be aware of is that a school you included in your FAFSA may select you for verification. If you’re selected, you will most likely need to provide extra documentation to confirm what you entered on your application.

However, according to Federal Student Aid, this isn’t something to be overly concerned about. Many schools do this arbitrarily, while others will require this verification for all applicants.

Overall, the most important factor to worry about is providing all documentation that is being requested on time. Missing deadlines could result in not getting the federal aid you requested, so it is important to stay on top of that.

Step 5: Await Your Financial Aid Award Letter

Once you’ve completed your FAFSA, you should receive a financial aid award letter from the colleges you listed on the form. When you receive this letter will differ depending on the college or university.

If you’ve already been accepted to the school and still haven’t received the award letter, you can call the financial aid office of the college to ask about your letter’s status.

The financial aid award letter will give you a detailed overview of everything you qualify for. This can include grants or work-study opportunities. If the letter only contains an offer for student loans, then you most likely haven’t qualified for any form of free aid.

Compare Loans and Only Accept What You Need

When looking at the different loans offered to you, you will most likely see a mixture of subsidized and unsubsidized loans. A subsidized loan will not accrue interest while you’re enrolled in school, so these are the best loans to get access to right away.

However, it is important to remember that you don’t have to accept all the aid that is offered to you. Additionally, it should be noted that scholarships and grants don’t have to be repaid, unlike a student loan. With that in mind, you should take only what you need so that you don’t have a hard time paying it off later on.

Taking on too much debt can be detrimental in the long run. While it might be tempting to get access to more money right away, living more comfortably while in school with more money available to you comes at a cost.

The interest that will be racked up on a higher loan amount can become difficult to pay off in the future, which is why it is recommended that you only borrow what you need to cover tuition, books, and housing.

Finally, make sure to compare aid packages from the different colleges you applied to see which one makes the most sense for you.

Before Taking Out a Student Loan, See What You Can Get for Free

While student loans will be necessary for most students, other avenues should be explored before taking on a large amount of debt. When you fill out your FAFSA, you will be able to see which grants and work-study programs are available to you, but you shouldn’t stop there.

Here are some other moves you can make to get the most money possible for your education.

Apply For Grants

Students looking to get as much money as possible for their education should look into what types of grants they are eligible for. Grants will many times depend on an individual’s situation and will take things like where you live and what you wish to study into consideration.

With that being said, grants do not need to be paid back! So you can rest easy knowing a part of your tuition is completely covered and will not need to be repaid in the future.

Look For Scholarships

Many prospective students think they need to have the best grades to get a scholarship, but this isn’t always the case. Scholarships can be granted based on activities you participate in as well as your heritage. There are many scholarship options available if you know which ones to apply to.

To learn what scholarships are out there, you may want to speak with your school counselor or contact a school you wish to go to for more information. It won’t hurt to do a quick Google search, either.

Search for Colleges with the Best Financial Aid

Many schools pride themselves on being able to offer excellent aid to students in need. There are even no loan colleges that offer students the ability to attend school without taking on a loan. Be sure to check out all your options and try to keep an open mind.


Having gone over the student loan process, we hope that you now have a solid understanding of the steps required to apply for federal aid. While the process can take some time, it is generally pretty straightforward.

Those looking to apply for a federal loan need to do so through the FAFSA and should be able to find out what type of aid they’re eligible for through that process. While it is tempting to take out a large amount of money to be comfortable during your college years, it is important to never borrow more than you need.

While these loans carry less interest than private loans, they can still be a major expense in the future. Make sure to compare all different aid packages when applying to ensure the money you’re borrowing is going to make sense for you long term.

And always, remember to be patient with yourself and stay organized. You got this!

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