Skip to main content

When Do I Need to Apply for Private Student Loans?

By U.S. News & World Report

Congratulations! You’ve received your college acceptance letters and committed to your top-choice school. But even after submitting the Free Application for Federal Student Aid and receiving your financial aid award letter, your bank account is coming up a bit short on tuition funds. What now?

For some students who need to bridge the gap between their financial aid and their school’s cost of attendance, private student loans can be a viable option. If you’ve decided to borrow from a private lender, keep reading to learn the timing of the private student loan application process, so you can focus on what really matters: earning your degree.

[Read: Best Private Student Loans.]

Timeline of the Private Student Loan Process

Private student loans are completely different from federal student loans, which have strict application deadlines that can vary based on the state in which you live. Private lenders don’t follow the same processes as federal student loan servicers, so the exact path forward depends on which private student loan lender you select as well as the school you’ve chosen to attend.

It makes sense to begin the private student loan application process after you’ve committed to a university. That way, you’ll know how much money you need to borrow as well as the school’s tuition payment deadline. With that information in hand, you’ll want to give yourself a few months to shop around for private student loans.

Many college tuition deadlines are in August, at least several weeks before the start of the semester. Given that timeline, you’ll want to begin applying for student loans around May or June, although you can still apply for private loans in July or even August. Here’s what the timeline looks like:

— April: Receive your financial aid award letters in the mail and select a university by the end of the month.

— May, June and July: Accept your federal student loans, grants and scholarships. Apply for private student loans if you’ve used up the maximum amount of federal aid you are eligible for and need to bridge the financing gap.

— August: Pay tuition by your school’s deadline. It’s important to pay your college tuition on time, since schools usually assess a late fee for missing the payment due date.

It doesn’t usually take very long to apply for a private student loan, with many lenders offering preapprovals in just minutes. Still, it can take a few weeks to get full approval if your application hits any snags, so it’s best to give yourself plenty of time to avoid missing any tuition deadlines.

You should also leave time to compare private student loan offers, shopping around for the lowest interest rate and best repayment terms possible for your financial situation.

What You Need to Apply for a Private Student Loan

Being prepared for your private student application can make the process go smoothly and help avoid delays. You’ll be asked to provide the following information and documents when you submit your private student loan applications:

— Personal information, like Social Security number, photo identification (driver’s license or passport), permanent address, phone number and email.

— School information, like enrollment verification, program details (degree type and graduation date) and your school’s cost of attendance (tuition, fees and other expenses).

— Financial information, like proof of income (tax returns or pay stubs), bank statements and requested loan amount. You’ll also need to consent to a credit check.

Keep in mind that private student loan approvals are based on your credit rating — and many young adults don’t have an established credit history. The vast majority of private student loan borrowers have cosigners who are willing to take on the responsibility of repaying the loan if they can’t make payments.

Borrowers who applied for a private student loan through Sallie Mae were three-and-a-half times as likely to be approved with the help of a cosigner, according to the lender.

Before you apply, identify a creditworthy cosigner like a parent or guardian. You’ll need their personal and financial information to complete the private student loan application. Some lenders offer a cosigner release, which removes the cosigner from the loan after a certain number of on-time monthly payments.

[Read: Best Parent Student Loans: Parent PLUS and Private.]

Do You Need to Reapply for Private Loans Every Year or Semester?

You must fill out the FAFSA every year, which means that your financial aid package can vary from one academic year to the next.

That being said, while some private student loans require you to apply for a new loan for each academic period (which can be a semester or a full academic year), others offer multiyear approvals. You might be seeing a trend here: The process depends on the lender you choose.

Since applying for a private student loan requires a hard credit inquiry, getting approved for multiple years at once can limit the negative impact on your credit score — and that of your cosigner. It can also make it smoother to get the financing you need to pay for school.

However, it may be beneficial to shop around for a new private student loan lender for the upcoming school year if your financial situation has improved. For example, you may be able to get a lower interest rate if you or your cosigner have a higher credit score or income, and a lower student loan rate can save you money over time.

More from U.S. News

Will Your Student Loan Company Choose Your Degree for You?

Undergrad Loan Limits Haven’t Risen Since 2008. Why Not?

More Students Will Soon Need Private Loans. 40% Won’t Qualify, Study Finds

When Do I Need to Apply for Private Student Loans? originally appeared on usnews.com

Update 05/08/26: This story was previously published at an earlier date and has been updated with new information.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Pope Leo XIV draws 1.2 million to Mass and challenges Europe to acknowledge its Christian roots

Years of pent-up emotions came flooding out of Alexander Zverev when he finally won the French Open

The Nigerian army frees 360 abducted people in northeastern Borno state