Many students plan to get a student loan at the start of their graduate school. But, students won’t receive their loans until the time class starts. Moreover, when a student will get the loan also depends on the specific school.
- Regardless of the type of student loan, there’s a waiting period before you get the money
- When a student can get a loan depends on what type of loan he/she has applied for
- You should keep in mind that there is a time difference between federal student loans and private student loans
- Before you apply for a student loan you have to estimate the total cost of the grade school
- Federal direct loans are the most affordable source of funds and these loans are usually available in October every year
How To Get Student Loan
If you want a student loan but don’t know how to get student loans for grad school then you should follow the below steps:
1. Estimate the costs of the grade school
2. Compare different loan options for graduate student
3. Fill out the FAFSA in October
4. Apply for private loans
Estimate The Costs Of The Grade School
Before you apply for a student loan you have to estimate the total cost of attendance. You have to figure out everything including tuition fees, room and board, books, transportation costs, and other costs. Most of the schools have a chart on their website that will help you estimate the total cost of attendance. These estimates typically include costs related to the school as well as other general costs.
Once you got the idea of the cost, now adjust it with your own situation. For example, if you can live in your house and can go to school then you can exclude the cost of room and board from the final estimate. This way you will get a good idea of what your costs will be and you will be able to subtract any scholarships, savings, and family contributions, to get to the final estimate. Finally, you will understand how much money you have to borrow.
Compare Different Loan Options For Graduate Student
In this step, you have to figure out from where you can get the student loan. There are three options available when it comes to student loan –
1. Federal direct loans
2. Grad PLUS loans
3. Private loans
Check the below table to get a quick idea about the above loan options
|Criteria||Federal Direct Loans||Grad PLUS Loans||Private Student Loans|
|Maximum Amount You Can Borrow||Annual limit: $20,500School’s financial aid office also imposes limits based on the need||Up to the cost of attendance||Varies by lenderUsually depends on the cost of tuition|
|Credit Requirements||No credit checkA credit score doesn’t determine eligibility||Eligibility will be determined based on your creditIf you can’t qualify based on your credit score then you will require an endorser||Eligibility will be determined based on your credit and incomeIf you can’t qualify based on your credit score then you will require an endorser|
|Interest Rates||Fixed-rate of 4.30%||Fixed-rate of 5.30%||Fixed or variable rates, varies by lender|
|Origination Fees||1.057% for loans disbursed between Oct. 1, 2020, and Oct. 1, 2021||4.228% for loans between Oct. 1, 2020, and Oct. 1, 2021||Varies by lenderMany loans have no origination fees|
|Repayment Terms||Multiple repayment optionsStandard 10-year repayment planGraduated repaymentIncome-driven repayment plans||Multiple repayment optionsStandard 10-year repayment planGraduated repaymentIncome-driven repayment plans||Varies by lenderTerms typically range from five to 20 years|
|In-School Repayment Plans||Don’t have to make payment when in school||Don’t have to make payment when in school|
Fill Out The FAFSA In October
FAFSA stands for Free Application for Federal Student Aid. Federal direct loans are the most affordable source of funds therefore its demand is very high. This loan is available every year in October. So if you will be attending school in the 2021-22 academic year then your FAFSA becomes available in October 2020. Federal loan is limited so you have to apply quickly. Moreover, schools and states may also set earlier deadlines so make sure you meet any deadlines specific to your situation. If you are accepted by the federal aid then the funds will be disbursed to the school before the semester begins so you don’t have to worry about the tuition fees.
Apply For Private Loans
Applying for a private student loan is a bit more complicated than a federal loan. Moreover, there are more options to choose from when it comes to a private loan. You can get a student loan from different financial institutes including online lenders, local and national banks, and credit unions. You can submit multiple applications to different lenders and compare their pricing. When you are applying for a private student loan then you have to provide some information including –
1. Basic personal information like name, address
2. Information about the school
3. Information about other sources of financial aid
4. Information about income and assets
How To Apply For A Federal Student Loan
You have to apply for a federal student loan by filling out and submitting the Free Application for Federal Student Aid (FAFSA). There is no cost for submitting the FAFSA form. You have to complete the FAFSA every year if you need money for your college. You can submit the FAFSA form starting October 1 for the following school year. This loan is awarded on a first-come, first-served basis so try to apply as early as possible. When you are filing your FAFSA form you have to provide information including –
1. Driver’s license and Social Security number
2. Parent’s email addresses so that they can supply their Social Security numbers and birthdates
3. Permission from the family member who completed a tax return
4. Information of Federal income tax return
5. W-2 forms
7. Information about your family’s investments
How To Apply For A Private Student Loan
For private student loans, you have to apply directly to the lenders. Now follow the below steps:
1. First, visit the lender’s website from your computer
2. Now check the interest of the loan as well as the flexibility of repayment options, benefits, etc.
3. Then apply directly on the website
4. Select the type of repayment option and interest rate
5. You can also add a cosigner and it will increase your chance of getting the loan
6. Finally, the lender will check your credit score and let you know their decision
FAQs About Student Loans
1. What Are The Basic Eligibility Requirements Of FAFSA?
The basic eligibility requirements of FAFSA are:
1. The applicant must be a U.S. citizen or an eligible noncitizen
2. The applicant must have a valid Social Security number
3. The applicant must be enrolled or accepted as a student in an eligible school/college, etc.
2. Do Student Loans Go Directly To The School?
Yes, both the Federal and private student loans go directly to the school. So the loan takes out tuition fees and room and board fees if you live on campus. If there are any remaining funds of the loan then it will be distributed to you.
3. How Long Does It Take To Get A Student Loan?
If you are applying for a Federal loan then it will take around 1 to 3 weeks to process the student loan. On the other hand, if you are applying for a private student loan then it might take 2 to 10 weeks to process the loan.
4. Can I Use Student Loans To Pay Rent?
Yes, you can use the student loan to pay the rent because student loans can be used to pay for both on- and off-campus housing including rooms and boards. So a student can pay the rent of an apartment or other forms of residence away from campus.
5. Can I Use My Student Loan To Buy A Car?
No, you can’t use your student loan to buy a car. Moreover, a traditional auto loan has less interest rate than student loans. So it won’t be a wise decision to use a student loan to buy a car.
6. How Much Income Is Too Much For FAFSA?
There is no income limit with the Free Application for Federal Student Aid (FAFSA). It means any eligible student can apply for FAFSA regardless of the income of the family.
7. Does FAFSA Check Your Bank Accounts?
No, FAFSA doesn’t check the bank account of the applicant. However, the applicants have to provide little information like total assets including checking and savings accounts.
8. Can I Spend FAFSA Money On Anything?
No, you can’t spend the FAFSA money on anything. You can only use the Federal loan on purchases that are directly related to your study.
9. How Much Money Does FAFSA Give?
The amount of Federal loans you can get depends on your financial need. But the maximum amount you can get from FAFSA aid is $10,000 per year.
10. What Is The Income Limit For Pell Grant 2021?
If your EFC is $5,711 or less for the 2021-22 academic year then you will be eligible to receive the Pell Grant. The maximum Federal Pell Grant award you can get is $6,495 for the 2021-22 award year.
Last Updated on November 7, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.