Who Is Eligible for Student Loans?

Updated on April 10, 2024

At a Glance

  • FAFSA, or Free Application for Federal Student Aid, is a form required to access financial aid for college.
  • It is completed by students to qualify for student loans and determine the amount of financial assistance they will receive.
  • Eligibility criteria include having a valid Social Security number, U.S. citizenship or eligible noncitizen status, a high school diploma or equivalent, and enrollment in an eligible program. Required documents include identification, income records, and tax returns.
  • The process involves completing FAFSA, reviewing the financial aid award letter, and responding to the school’s offer. The COVID-19 pandemic has introduced payment suspensions and other relief measures. Loss of FAFSA eligibility can occur due to various factors, including failure to maintain academic progress or defaulting on a student loan.

Student loans are a great way for students to get financial help when they are in college. This type of financing is meant to help students pay for education-related costs, like tuition, supplies, books, as well as living expenses. Since it’s a loan, you are expected to pay it back over the years, which is the less pleasant side of this process.

Who is eligible for student loans, though? While there are different options for all students, only a select few will qualify for student loans. What are the eligibility criteria? This post will clarify everything.

What Is FAFSA?

FAFSA stands for Free Application for Federal Student Aid. This is a special form you must complete in order for the federal government to grant you access to financial aid. It can be completed by both graduate and undergraduate students. Many students fill out the FAFSA to get a student loan which then helps them pay for any college expenses.

The FAFSA is used by several colleges and states in order to determine the particular students that will get financial help, as well as the amount each one will receive.

Eligibility Requirements for FAFSA

Do you want to qualify for a student loan? If that’s the case, you must be eligible for FAFSA first. Here are the eligibility criteria you must meet:

  • You should have a valid Social Security number
  • You must be a citizen of the U.S. or a noncitizen that has national status in the U.S. or has an Arrival/Departure Record, a green card, or a battered immigrant-qualified alien status. You could also have a T visa or be the child of someone with a T-1 visa.
  • You should have a high school diploma or an equivalency that is recognized. This could be a GED. You might also qualify if you’ve completed a home-school high school education program approved by the state.
  • You must keep amazing progress in college after enrolling. Each school has its own standards when it comes to satisfactory academic progress.
  • You have to be enrolled or accepted to enroll in a certificate program or degree that is eligible.

Federal loans come with no income requirements. Also, incoming students don’t have any GPA requirements and they can be used for universities or community college. For some scholarships, the Pell Grant and work-study aid, though, there might be income requirements.

Documents Required to Submit FAFSA

In order to submit your FAFSA successfully, you need to prepare certain documents, such as:

  • Your driver’s license (if you own one)
  • Your Social Security card
  • The W-2 forms from you and your parents for 2021
  • The tax returns from you and your parents for 2021
  • The untaxed income records from you and your parents for 2021
  • The current bank statements of your parents

While the parents’ information is required in some cases, you will not have to submit it if you’re independent.

On top of this, you must make an FSA ID. This ID will allow you to sign the promissory notes and FAFSA. Then, it’s necessary to sign a specific certification statement on your FAFSA. It should mention that you do not currently owe any money on a federal student grant, you are not in default of any federal student loan, and that you agree you will only use the financial help for educational purposes.

How to Take out Student Loans

Many students think that obtaining and applying for student loans is extremely complicated. However, the process is quite simple – what is difficult is trying to understand whether you are eligible for the aid or not. To take out a student loan, you must do the following things:

Find Out If Your Colleges Are Eligible for Student Aid

Only specific institutions will be eligible for financial aid, so if you enrolled in a certain college and want federal student loans, it’s crucial to find out if it’s eligible.

Eligible schools include postsecondary vocational institutions and higher education institutions that can meet certain requirements. In order for an institution to qualify for student aid, it must provide a qualifying certificate program or degree that could later help the student make a career and find profitable employment.

Complete Your FAFSA

If your school qualifies for federal student aid, you can proceed with filling out your FAFSA. You must create an FSA ID for it. Also, you can complete it online, as the process is very easy.

Whether you are the student yourself or a student’s parent, you can pick the academic year you are currently applying for after logging into the FAFSA platform. Once you log in, you can start providing the requested information.

To fill out the FAFSA, the student’s personal details must be included. Other than that, you must add information about the school where you want the application to be sent. Sometimes, information about the parents and the dependency status must be included in the form.

Lastly, you must also add financial information.

In the end, you have to sign and send the form.

Review Your Financial Aid Award Letter

Once the FAFSA is completed and sent, it will be received by the school you’ve picked. How much you will receive for the student loan will be decided by the school’s financial aid office.

But the information will also be transferred to the Department of Education, then the Student Aid Report. You will later receive an award letter that tells you how much financial aid you are going to receive. Keep in mind that it might take some time before you receive the award letter, depending on the school.

You will then have to review the financial letter and tell the financial aid office what you wish to do. It’s crucial to respond as soon as possible.

If you’re approved for the loan, the school will tell you when and how you’ll receive the money.

Impact of COVID-19 on Student Loans

COVID-19 changed the student loan situation a little bit. Borrowers are allowed to suspend payments until December 31, 2022, without being penalized. All the payments made on this financial aid during this period will go to interest gathered before March 13, 2020. Afterward, it will go to the main balance. Besides, you will not have to worry about more interest gathering during this time.

Any skipped payments for people opting for a Public Service Loan Forgiveness or forgiveness under an income-driven repayment plan will still count for the monthly repayments.

No tax money or refunds will be granted from other federal aid for students who haven’t done student loan payments during this period.

What Causes You to Lose Eligibility for FAFSA?

You could easily lose FAFSA eligibility in these situations:

  • You did not submit the FAFSA for each year you’re enrolled
  • You were unable to maintain proper academic progress during your studies.
  • You used to be a noncitizen who qualified, but your status is either revoked or it expired
  • You defaulted on a student loan.
  • You get to the maximum annual or aggregate lifetime loan limits for subsidized or unsubsidized student loans
  • You haven’t enrolled in an eligible program for funding.

6 Best Private Student Loans

Navigating the complexities of college financing can be a daunting task, especially when federal loans either fall short of your needs or aren’t accessible at all. For many students, this is where private student loans step in. These loans can bridge the financial gap, ensuring that your educational journey isn’t hindered due to funding constraints. Whether federal aid didn’t fully cover your tuition, or you found yourself ineligible for it, private lenders offer a wide array of loan solutions tailored to unique academic and financial scenarios. Discover some of the top private student loan providers that can come to your rescue when federal avenues are limited or unavailable:

AmOne (Best for Okay to Good Credit)

AmOne is well-positioned as a reliable choice for students with okay to good credit profiles. By linking potential borrowers with a broad network of lenders, AmOne streamlines the loan application process. This can be particularly beneficial for students who may not have stellar credit but are above the threshold of bad credit. Their system ensures that even students with average credit scores can obtain competitive rates and terms that fit their educational financial needs.

AmOne Personal Loans

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600

Fixed APR

3.99%-35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 600.
  • Fixed APR: 3.99%-35.99%.
  • Loan amounts: $1,000 to $50,000.
  • Repayment: 1 to 7 years.

Qualifications

  • Must be at least 18 years old.
  • Must be a U.S. citizen or permanent resident.
  • While there’s no specific income requirement, a consistent source of income is essential for the applicant.

Pros

  • Suitable for individuals with lower credit scores.
  • No cost for the matching service.
  • Attractive loan rates.

Cons

  • Acts as an intermediary, not a direct lender.
  • Risk of multiple contacts from prospective lenders.
  • Lack of clarity on lender details.

Spring Loans (Best for Bad and No Credit)

Navigating the world of student loans can be particularly daunting for those with bad or no credit history. Spring Loans offers a compassionate solution, emphasizing a borrower’s entire financial picture rather than solely relying on traditional credit scores. This unique approach, which factors in more than just credit history, enables students with less than ideal or non-existent credit profiles to access the funding they need for their education.

Spring Loans Personal Loans

4.2
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 27.00%
  • Loan amounts: $3,000.
  • Repayment: 48 months.

Qualifications

  • Demonstrate a recurrent income.
  • Minimum age prerequisite: 18 years.
  • Validate U.S. citizenship status with an SSN.
  • Provide a legitimate U.S. driver’s license or a state identity card.
  • Establish a functional bank account for incoming deposits.
  • Adhere to any specific demands by the loan provider.

Pros

  • Open to applicants with any credit background.
  • Four-year loan period aids in structured financial management.
  • The $3,000 offer addresses several short-term financial challenges.
  • Wide-reaching eligibility criteria invite a broad spectrum of applicants.
  • The focus on dependable income over job title benefits varied income sources.

Cons

  • The set 27% APR is higher than many alternatives.
  • Restriction to a $3,000 loan might not cover all financial outlays.
  • Possessing specific IDs is mandatory, sidelining some applicants.
  • A prerequisite for an ongoing bank account may limit certain users.

First Premier Lending (Best for Bad Credit)

First Premier Lending is a beacon of hope for students with credit challenges. Recognizing that a bad credit history doesn’t define a student’s future potential, they offer tailored loan solutions that consider the broader context. Their commitment ensures that students with credit missteps still have avenues to finance their education without being bogged down by prohibitive interest rates or stringent conditions.

First Premier Lending Personal Loans

4.2
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

None

Fixed APR

27.00%

Variable APR

N/A

Overview

  • Minimum credit score: None.
  • Fixed APR: 27.00%.
  • Loan amounts: $3,000.
  • Repayment: 48 months.

Qualifications

  • Maintain a consistent source of income.
  • Must be at least 18 years of age.
  • Possess valid U.S. citizenship and a legitimate social security number.
  • Hold a current U.S. driver’s license or state-issued ID.
  • Keep an active bank account for direct deposit.
  • Satisfy any lender-specific criteria, such as credit rating, borrowing history, or place of residence.

Pros

  • No minimum credit score requirement allows accessibility for those with varied credit histories.
  • 48-month term provides clarity and allows for long-term financial planning.
  • Specific loan amount of $3,000 can meet many short-term financial needs.
  • Broad set of qualifications make the loan accessible to a wide range of people.
  • Emphasis on consistent income, not necessarily employment type, allows flexibility for borrowers.

Cons

  • A fixed APR of 27% is relatively high.
  • Loan amount is capped at $3,000, which might not cater to larger financial requirements.
  • Requirement of a U.S. driver’s license or state-issued ID could exclude some individuals.
  • Mandatory active bank account could be limiting for those who are unbanked.

College Ave (Best for Good Credit)

For students boasting a good credit profile, College Ave stands out as a top choice. Offering a suite of tools, calculators, and user-friendly interfaces, they simplify the loan selection process. College Ave’s competitive rates and diverse loan terms reflect their aim to reward those with good credit, ensuring that students can finance their education with ease and peace of mind.

College Ave Undergraduate Private Student Loans

4.8
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

600 or better

Fixed APR

4.07% - 15.48%

Variable APR

5.59% - 16.69%

Overview

  • Minimum credit score: 600 or better.
  • Fixed APR: 4.07% – 15.48%.
  • Loan amounts: $1,000 – $150,000.
  • Repayment: 5, 8, 10, 15, and 20 years.

Qualifications

  • U.S. citizen or permanent resident.
  • For undergraduate loans: Part-time enrollment at an accredited college/university.
  • International students: Need a Social Security number and a co-signer.
  • For refinance loans: Must be 18 years or older.
  • For refinance loans: Graduation from an eligible school is required.

Pros

  • Prequalify with a soft credit check
  • Flexible repayment options
  • Offers co-signer release for private loans

Cons

  • Charges late fees
  • Must have graduated to be eligible to refinance
  • Half of repayment term must have passed to release co-signer

Sallie Mae (Best for Very Good Credit)

A titan in the student loan sector, Sallie Mae continues to be a preferred choice for students with very good credit. Their rich history, combined with an understanding of the evolving educational landscape, allows them to offer premium loan conditions. Students with excellent credit profiles can tap into Sallie Mae’s resources, benefiting from optimal rates and terms that ease the journey through higher education.

Sallie Mae Undergraduate Private Student Loans

4.5
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

Mid-600's

Fixed APR

4.50-15.49%

Variable APR

6.37-16.70%

Overview

  • Minimum credit score: Mid-600’s.
  • Fixed APR: 4.50-15.49%
  • Variable APR: 6.37-16.70%
  • Loan amounts: Minimum of $1,000 per year.
  • Repayment: 10 to 15 years.

Qualifications

  • Typical credit score of approved borrowers or co-signers: Does not disclose.
  • Minimum income: Did not disclose.
  • Loan amounts: $1,000 up to 100% of the school-certified expenses.

Pros

  • One of the few lenders to provide loans to part-time students.
  • Non-U.S. citizens, including DACA students, can apply with a U.S. co-signer.

Cons

  • You can’t see if you’ll qualify and what rate you’ll get without a hard credit check.

Upgrade (Ideal for Good to Excellent Credit)

While eligibility for traditional student loans may vary, Upgrade offers personal loans that provide a flexible financing solution for individuals seeking to fund their education. With our efficient digital platform and quick loan approvals, those with good to excellent credit can rely on Upgrade to support their educational journey, regardless of their specific eligibility for traditional student loans.

Upgrade Personal Loan

5.0
Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score

560

Fixed APR

8.49% - 35.99%

Variable APR

N/A

Overview

  • Minimum credit score: 560
  • Fixed APR: 8.49% – 35.99%
  • Loan amounts: $1,000 to $50,000
  • Repayment: 3 to 5 years (7 years on some larger loans)

Qualifications

  • Possess an active bank account.
  • Able to provide a legitimate email address.
  • Minimum age requirement: 18 years (19 for Alabama residents).
  • Credit score of 600 or higher.
  • Annual income of $25,000 or more.

Pros

  • Willing to accommodate borrowers with a credit score as low as 560.
  • Offers flexibility with a range of loan amounts from $1,000 to $50,000. This can be suitable for both small and large financial needs.
  • Provides options for repayment, allowing borrowers to choose a timeline that best suits their financial situation.
  • Once approved, borrowers can access funds in just one day, which is useful for urgent financial needs.

Cons

  • Origination fees can go as high as 9.99%, which might add a significant cost to the loan.
  • Apart from the origination fee, there are fees for late payments and failed payments, which can add up if one is not careful.
  • While there is an option to extend repayment for larger loans up to 7 years, it’s not standard for all loan amounts.

Read More

Final Thoughts 

Students must be part of an eligible program, maintain satisfactory academic progress and be eligible U.S. citizens or noncitizens to qualify for a student loan. Make sure to complete the FAFSA correctly if you want to get the student loan you’re looking for. And don’t forget, private loans from lenders like College Ave are always available, as well.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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