Applying for Student Loans

When it comes time to finance your college education, there are 2 types of loans you could consider – federal student loans and private student loans. Depending on your financial situation, you may need to apply for both federal aid and a private student loan to cover all your college expenses. Here’s a look at what makes them different.

• Federal student loans usually don’t require a credit check, may offer the option of deferment of loan payments while in school or seeking a job, and don’t require a co-signer. In this program, the U.S. Department of Education is your lender, and there are limits to how much you can borrow each year. 
• Private student loans from lenders, like credit unions and banks, are a good way for a borrower to pay for higher education costs not covered by other means. Your lender will perform a credit check to determine eligibility and the terms of the loan. You may need a co-signer to qualify or get the optimal interest rate. 

The Application Process

You should always apply for Federal student aid first. Step 1 is filling out the Free Application for Federal Student Aid (FAFSA) form from the U.S. Department of Education to see how much federal aid you’re eligible for. If your financial aid award doesn’t fully cover the cost of attendance, you might consider other types of student loans such as private student loans or Parent Plus loans. Private loans have their own applications that differ by financial institution.

Federal Application

The Free Application for Federal Student Aid (FAFSA) connects you with grants, loans and work-study funds through the federal government. Many states, colleges and career schools also use your FAFSA to award you their aid.

To be considered for federal financial aid, you must fill out a new FAFSA every year. Forms are available online at FAFSA.gov starting Oct. 1 for the next school year. 

If you have the information you need, you can complete the form in about 30 minutes. Once you start it, you can save it and return to finish later.

In general, you’ll need the following information:

• Social Security or Alien Registration Number
• Driver’s license number if you have one
• Tax information or tax returns
• Records of untaxed income
• Cash, savings and checking account balances
• Investments other than the home in which you live
• Schools with which you want to share your data

If you’re applying as a dependent, details about your parents’ finances are also needed.

You can fill out and submit your FAFSA online at FAFSA.gov, or you can download a copy of the form and mail it in. Within a few days, you’ll get an email letting you know your FAFSA was processed.

If you’re a first-time applicant, you’ll receive an award letter with your aid offer from each school you listed on your FAFSA. Compare your offers and loan terms, and use them to help you make a decision about enrollment. Renewal applicants will receive an aid offer from the school they’re attending.

To receive your financial aid, formally accept your aid offer. Talk to your school’s financial aid office about when and how your aid will be paid out, what it covers and if any leftover aid balances will be deposited into your account once tuition and fees are paid. 

Private Student Loan Application

Private student loans are a good option to help cover costs not met by federal student loans, grants and scholarships. Before you apply, compare the amount of federal aid you received to the total amount you need to attend your school to help identify your required loan amount.

Many private lenders, including Navy Federal Credit Union, let you apply online. While the process varies by lender, you’ll likely need to supply the following information:

• Permanent address, phone number and email
• Social Security Number
• Basics about your academic standing, including current GPA
• Proof of income 

If you have a co-signer, they need to provide much of the same information.