Once you know how to apply for student loans, the process can seem easy, but for those starting out it can be difficult to know how much to ask for, where to turn, and what terms are most favorable in your situation. Our guide can help you navigate the tricky waters of student loans and make smarter decisions.

Figuring out how to apply for student loans can be a daunting process if you haven’t done it before. Different individuals will have different amounts of funding they need to cover their tuition and other student expenses, and getting federal and private loans can help.

There are a few different kinds of student loans, and some will have a fixed interest rate while others have variable interest rates that can change over time. Federal loans are generally used first as they often provide the most advantageous terms, and private loans can be taken out to cover the remaining bill for your education.

Free Money and Federal Loans

Generally, the guideline on how to apply for student loans is that you should use the free money available to you and then move on to take out federal loans. Frequently, federal loans are sufficient to cover the cost of completing a degree, but for specific degree programs, additional funding may be necessary.

For those pursuing degrees in medicine, law, or business, private loans may be needed to cover the costs of tuition and other expenses as these programs typically have a higher cost of attendance or involve more credit hours.

The Application Process

To be awarded grants and get access to federal loans you’ll need to complete a FAFSA application online which involves creating an account and answering some questions about your plan for enrollment and income.

If you are a student, you’ll need to enter tax information which may require the help of your parent or guardian. The process should take less than an hour if you have all of the necessary materials on hand and the website includes a wealth of information about specific loans that apply to degrees such as teaching.

You'll want to apply as soon as the application becomes available on July 1st if you plan to enroll in the fall. Once you fully complete the application and submit it, your institution and the government coordinate to provide you with an aid package based on financial need, and the availability of funds at the institution where you're enrolled.

If you were accepted to several schools, but have yet to select one, you can enter the information for several different institutions to see what kind of financial aid package you'll be offered for each one. The funding from the federal government likely won't change much; however, different colleges have different amounts of funding that they are able to disperse.

If the financial aid package that you receive doesn’t offer enough funds to cover your entire degree program, you can always opt to take out private loans to cover the remainder or pay for them out of pocket.

There are some degrees where the remaining tuition is too high for a family or individual to cover without loans, and thankfully there are excellent tools available for finding private loans that have reasonable interest rates and easy to use interfaces.


When people talk about “free money" what they are typically referring to are the grants and potential scholarships that are available through your institution. The federal government offers Pell Grants, which students do not need to repay, and are generally considered to be monetary gifts.

The amount that you can receive from a Pell grant is generally under $6000, and the total will depend on your financial need, enrollment status, your plans for how long you will be attending school, and the cost of attendance.

Approximately 5400 institutions will accept Pell grants, and the amount you are awarded is impacted by the amount that you are expected to contribute to your education which is calculated once you submit your FAFSA application.

Pell grants are for students that have not yet received their first bachelor’s degree, and for select other programs typically related to teaching. The funds may be handled in a few ways depending on your institution and how the funds are dispersed.

The funds could be deposited directly into your school account which means that they will be immediately available for paying student expenses. The funds can also be paid to the student directly via check, or a combination of these two methods.

Types of Federal Loans

  • 1
    Direct Subsidized Loans
  • 2
    Direct Unsubsidized loans
  • 3
    Direct PLUS loans

Each loan type is slightly different and has different interest rates that change once per year for new loans. There is also a small origination fee for each one that is subtracted from your overall loan amount. This fee being deducted means that the amount of funds you receive will be slightly less than the total loan amount.

Direct Subsidized Loans

Direct subsidized loans accumulate no interest until six months after you graduate, or until six months after you are less than a full-time student. There is often the ability to defer when your repayment period starts, but in the meantime, interest may still accumulate.

Direct Unsubsidized loans

Direct unsubsidized loans collect interest from the date that they are issued, and the repayment period also begins six months after you graduate or drop below half-time enrollment. These loans also have deferment options for repayment, but the interest will still add up during that time.

Direct PLUS loans

Direct PLUS loans are for parents looking to take out loans for their child in order to cover tuition and other school expenses. Generally, all loans taken out for a student’s education are the responsibility of the student to repay; however, the PLUS loans allow parents to shoulder that burden and provide funding to their student.

Additional Resources

If you want more information about how to apply for student loans, the Federal Student Aid website offers a variety of videos that cover the financial aid process, financial aid myths, how to budget for your student loans, and responsible borrowing practices.

As part of your application, there is also entrance counseling which provides a wealth of information about the overall process, how interest and subsidized loans work, and what you can expect from the beginning of taking out loans until you pay them back in full.

The online site also provides a repayment estimator so you can get an idea of what type of payments you’ll need to cover once you are out of school. There is also financial awareness counseling that offers additional help with financial aid packages which takes about 20-30 minutes to complete.

The website will also walk you through the process of creating an FSA ID which is a unique identifier that helps to keep your information safe. For those that have parents that will be involved in the financial aid process, there is a particular section of the website that provides information for parent borrowers.

If you are looking to become a teacher, there are also specialized TEACH grants available that provide funds for specific teaching degrees. You must agree to teach full time for at least four years after graduation at the elementary, or secondary level, but you can also teach for an education service or agency.

The TEACH grant is designed to serve students that come from lower income families that also meet other criteria. The TEACH grant comes with its own counseling demo should you want to learn more, and there is an online guide.

Private Loans

If you plan to apply for private loans, it's a good idea to use one of the several different tools available to help you find the best private lender and the best rate. These tools allow you to release the minimum amount of personal information in order to receive real-life loan terms and help you avoid filling out duplicate paperwork.


Credible.com is widely considered the most accessible website to use when it comes to finding and private lender to cover your education expenses. The easy to use dashboard asks for a minimal amount of information and lenders compete to give you the best rates and lowest fees for your loan.

The proposed loan terms are not estimations, but rather actual offers that you can easily compare using the website. You can see results in as little as 15 minutes once you submit your application, and you’ll receive both fixed interest rate loan options and variable interest rate loan offers.


Simple Tuition has a vast network of lenders so you'll be sure to find a reasonable loan offer and possibly find future loans should you need them. The site asks for a minimal amount of information up front and offers quite a lot of information about the total amount the loan will cost you including interest and fees.

They also have significant resources to help borrowers weigh different rewards, repayment options, and provide information about the lending process.


​​​​CommonBond works to provide students with loans that are customized to them and not their parents. They offer to connect students with loans for undergraduate, graduate, MBA programs, and can also help with refinancing.

Each time a loan gets funded, they donate to a charity called Social Promise which provides schooling and teachers to third world countries.

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