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Community colleges offering two-year programs can be a wonderful option for students looking to gain a higher education in less time. It can also be a great option for those looking to save a little cash while bettering their current skills, prepping for a four-year university, or going for an associate’s degree.

Moreover, it can often save students thousands of dollars in the long run toward the career of their dreams too. Though community college can cost far less than a four-year school, it still isn’t free. Here are a few helpful ways to gain a little financial assistance for your personal education journey.

The Government Looks at Community College the Same Way It Does a Four-Year School

Federal student loans are available for both two- and four-year colleges. The process of applying for federal aid is the same, regardless of the school, as long as the Department of Education sees it as an “eligible degree or certificate program.” Vocational, career, trade, or online schools often offer federal loan options, but it’s not a guarantee. If you’re not sure whether your school participates in federal loan programs, you can confirm with your school before moving forward.

To apply for federal aid, including student loans, a potential student must fill out the Free Application for Federal Student Aid (FAFSA®). On the FAFSA, all would-be students will list the schools they are interested in attending using the Federal School Code. The schools listed will use the FAFSA application answers to determine the types and amounts of aid a student can receive.

After submitting the FAFSA, the applicant will receive an award letter from each school listed on the FAFSA application. This will tell you what aid you qualified for. If you plan on applying for federal aid to attend community college, consider applying as early as possible.

Some federal aid is determined on a first-come, first-served basis, so the earlier you submit your FAFSA, the better position you may be in to receive aid.

Those hoping to obtain a federal loan for community college can apply for one of three: Direct Subsidized, Direct Unsubsidized, and Direct Plus. Here’s how to determine which one of those may be the best fit for your education goals.

Direct Subsidized and Unsubsidized Loans for Community College

When it comes to borrowing federal student loans, the government offers both subsidized and unsubsidized loans to assist students in covering the cost of higher education. For both subsidized and unsubsidized loans, the school a potential student hopes to attend will determine how much a student is eligible to borrow.

Direct Subsidized Loans are based on financial need and they come with a major benefit — the U.S. Department of Education pays the interest while the student is still enrolled in school at least half-time and for the loan grace period (usually the first six months after leaving school).

Direct Unsubsidized Loans are similar to subsidized loans except that they are not based on financial need, they are based on your cost of attendance and other financial aid you receive. As such, the borrower would be responsible for all accrued interest on the loan. While not required to make payments as a student, there is an option to make interest-only payments on the unsubsidized loan.

When the interest on a Direct Unsubsidized Loan is not paid during periods of deferment, such as the grace period, the accrued interest will be capitalized. That means, when graduation day comes and the grace period ends, the interest that has accumulated on the loan will be added to the principal value of the loan and you’ll be responsible for paying off both. Interest will also continue to accrue based on that new principal.

There is an annual limit to how much money undergraduate students can borrow in Direct Subsidized and Unsubsidized Loans. For example, the limit for your first undergraduate year is $5,500 for dependent students (and $9,500 for independent students).

Direct PLUS Loans for Community College

There is another option from the government, known as the Direct PLUS Loan . This loan is available to parents of dependent students. Unlike both Direct Subsidized and Unsubsidized Loans, when a person borrows via a Direct PLUS Loan, he or she will be subject to a credit check. If the person has an adverse credit history, they may not be approved to borrow the loan.

If you are a parent of a dependent undergraduate student, you can receive a Direct PLUS Loan for the remainder of your child’s college costs not covered by other financial aid.

It’s important to note when a person borrows a Direct PLUS Loan, there are fees in addition to interest. With this loan, parents can borrow up to the cost of attendance (determined by the school) minus any other financial aid received. In order to obtain this loan, parents must qualify and their credit history will be checked. Interest will also accrue.

Private Student Loans

If a student does not receive enough aid through federal student loans or maxes out his or her eligibility for federal student loans, they can seek additional funding through private student loans. Private student loans can be borrowed from banks, credit unions, or other lenders.

Each institution has its own eligibility requirements so each borrower will have to check with individual lenders to see about qualifications. Like federal loans, there is usually a limit to the amount you can borrow with private loans, which can vary by lender. The limit might be the cost of tuition, less the amount of aid the student is already receiving, for example. However, the limit on some private loans may be higher than the federal loan limit.

Furthermore, government student loans come with deadlines to apply , while students may apply for private student loans at any time. But one major downfall of private student loans is the fact that they may also come with higher eligibility requirements, like a specific credit score, to even be considered. Additionally, private lenders aren’t required to offer the same borrower protections as federal student loans, such as a grace period or income-driven repayment plans. Because of this, private student loans are generally considered only after all other financing options have been thoroughly reviewed.

Other Options For Community College Student Loans

Federal and private student loans aren’t the only options. And this is where, as a student, you can really do some homework.

Several states also offer their own student loan programs to help students. To qualify for many of these loans, a student must be a resident of the state program you’re applying for, or an out-of-state student enrolled in a college or university within that particular state. Check out each state’s student loan offerings here .

Saving Post-Graduation

Even if you went to community college, you may still graduate with student loan debt. But, there’s a way you can save after graduation as well. Upon completion of your degree (or, if you’ve already finished school), you may want to consider looking into student loan refinancing with SoFi.

This way, you may be able to get a better interest rate than what you originally qualified for or change the terms of your loan to fit your post-grad life. And you can focus on earning and saving for your future thanks to your hard-earned education.

When you refinance with SoFi there are no prepayment penalties or origination fees. Plus you’ll gain access to benefits like community events, career coaching. To see what your student loans could look like after you refinance with SoFi, take a look at our easy to use student loan refinance calculator.

Private Student Loans With SoFi

Community college students have a variety of options available to them when paying for their education. In addition to some scholarships or grants, students may use student loans, either federal or private, to help pay for college.

Private student loans can be an option for students who are looking to fill in financing gaps. SoFi offers no fee student loans with competitive interest rates available for qualifying borrowers. SoFi student loans also allow borrowers to select one of four flexible repayment plans.

Find out more about the student loan options available from SoFi. You can get a quote from SoFi in just a few minutes.

FAQ

Will student loans pay for all of college?

Student loans can be used to pay for college expenses. There are borrowing limits depending on the loan type. For example, first-year dependent students may be eligible to borrow up to $5,500 in Direct Loans. Of this, no more than $3,500 can be subsidized loans. Students may look to alternatives like private student loans to fill in gaps. The borrowing limit for federal student loans is determined by the individual lender.

How much are student loans for an associate’s degree?

Student loans for community college are available, including for associate’s degrees. In order to borrow a federal student loan, potential borrowers must be enrolled in an eligible degree granting program, as defined by the U.S. Department of Education. These programs may include associate degree programs.

What do you do if you can’t afford college?

If you can’t afford college, consider evaluating the costs and programs available at different colleges. Consider factors like location and room and board, in addition to tuition. Also fill out the FAFSA form, which allows students to apply for federal financial aid including grants and scholarships (which don’t typically need to be repaid) and federal student loans (which do need to be repaid). Consider contacting the financial aid office at your school for more personalized information.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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It can sometimes seem like there are an endless amount of student loans, but there are borrowing caps in place. Students face both annual and lifetime borrowing limits for federal student loans. The lifetime aggregate limit for undergraduate students is $57,500, of which no more than $23,000 can be in subsidized loans. For graduate students, the lifetime borrowing limit is $138,500, of which, no more than $65,500 can be in subsidized loans.

Private lenders may also have lifetime and annual borrowing limits, though those limits will be set by the lender. It’s possible to hit the maximum amount of loans allowed before finishing school, so it’s helpful to understand how much you may be eligible to borrow.

What Is the Lifetime Limit for Student Loans?

Students have the option to borrow federal student loans, private student loans, or both. Depending on factors like your year in school, there are aggregate and lifetime limits for borrowing.

Federal Student Loan Lifetime Limits

Federal loans have both annual and lifetime limits. The limits can vary by student, depending on three factors, including:

•   Your year in school

•   The type of loan you are eligible to borrow choose (subsidized vs. unsubsidized)

•   Your dependency status

Independent students, who the U.S. Department of Education considers to be on their own financially, can borrow more than dependent students who can typically get help from their parents.

Even if you’re financially independent of your parents, the definition of an independent student is fairly strict, and if you are under the age of 24, you’ll need to confirm you qualify as an independent student. If you’re not sure what you qualify as, see your guidance counselor or an admissions counselor who may be able to help.

If you’re not sure what you qualify as, see your guidance counselor or an admissions counselor who may be able to help. Here’s how the loan limits shake out depending on your status and year in school, straight from the U.S. Department of Education:

Year In School	Dependent Students*	Independent Students**
First-year undergraduate	$5,500 — no more than $3,500 can be subsidized	$9,500 — no more than $3,500 can be subsidized
Second-year undergraduate	$6,500 — no more than $4,500 can be subsidized	$10,500 — no more than $4,500 can be subsidized
Third-year and beyond undergraduate	$7,500 — no more than $5,500 can be subsidized	$12,500 — no more than $5,500 can be subsidized
Graduate and professional student annual limit	N/A (all graduate and professional degree students are considered independent)	$20,500 — none can be subsidized
Lifetime limit	$31,000 — no more than $23,000 can be subsidized	$57,000 for undergraduates — no more than $23,000 can be subsidized $138,500 for graduate and professional students — no more than $65,500 can be subsidized

^*Except students whose parents are unable to obtain PLUS Loans.

^**And dependent undergraduate students whose parents are unable to obtain PLUS Loans.

Note that the lifetime limit for graduate and professional students includes the amount in federal loans you borrowed during your undergraduate studies.

Private Student Loan Lifetime Limits

If you choose to borrow private student loans, know that the annual and lifetime limit may vary by lender. That said, the annual limits typically cannot exceed the cost of attendance at your school, less any financial aid you have already received.

The total cost of attendance is a number determined by your school and typically includes tuition and fees, on-campus room and board, books, supplies, transportation, and dependent care.

As for lifetime limits, it may depend on whether you’re an undergraduate student or a graduate student. Some private lenders may offer higher limits if you’re doing an MBA or going to law or medical school, for example.

Some lenders have just one limit for all loans. But in some cases, you may even see two-lifetime limits: one for loans through the private lender and one for total federal and private loans.

So, if you’re considering borrowing from a private lender, ask about their loan limits before applying to make sure you get the funding you need.

What to Do If You’ve Hit the Maximum Federal Student Loan Amount

If you’ve reached your lifetime limit for federal student loans or you’re close to it, it’s probably time to start thinking about how you’re going to repay your student loans. Here are some options if you’ve maxed out your options for federal loans.

Consider Student Loan Refinancing

One way to make progress toward paying off your student loans and potentially save money along the way is to refinance them with a private lender (provided you haven’t reached your limit with these loans, too). Student loan refinancing can allow you to replace your current loans with a new one.

In some cases, you may qualify for a lower fixed or variable interest rate than what you’re currently paying. You could also adjust your repayment schedule to pay off your student loans faster or take some more time to fit your budget better.

With a lower interest rate, you could reduce the amount of money you spend on interest over the life of the loan. If you lengthen the term of your loan you’d decrease your monthly payments but will pay more in interest over the life of the loan.

In other words, if you refinance your student loans, you may get more flexibility with your payments as you eliminate your debt. However, it is important to note that if you refinance your student loans with a private lender, you may forfeit eligibility for federal benefits, such as student loan forgiveness.

Check Out Federal Assistance Programs

If you’ve maxed out your federal student loans because your income isn’t where you’d like it to be, you may want to take a look at federal programs like income-driven repayment plans, deferment, or forbearance instead — all of which you’d give up access to if you refinance with a private lender.

Consider a Private Student Loan

If you’ve reached your limit on federal student loans but still need some assistance paying for your tuition, you might consider taking out a new private student loan. There are options for fixed or variable private student loans, and some lenders like SoFi offer flexible repayment options. Partial, deferred, or interest-only payments put a bit less strain on your budget.

The Takeaway

There are both annual and lifetime borrowing limits for federal student loans, the lifetime limit for undergraduate students is $57,550, of which no more than $23,000 can be in subsidized loans. Private lenders may also have borrowing limits, but they will be set by the lender. Generally speaking, private student loans are limited to the cost of attendance.

SoFi is one of the leading private student loan lenders and offers fee-free private student loans with competitive interest rates for qualifying borrowers. The simple application can be completed entirely online.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Congrats! Your school is offering you a scholarship and grant. And, your parents are pitching in. You’ve even been awarded some federal grant aid. But it doesn’t cover the entire bill.

If this is you, loans are an option. Taking on debt is not your first choice — but a college education can be an investment in your future. You can earn potentially 55% more with a bachelor’s degree than with only a high school diploma, according to National Center for Educational Statistics data from 2021.

State student loan programs are an option to consider. They are loans provided and guaranteed by state government agencies. The loan programs are unique to each state and require specific eligibility requirements, such as state residency, to qualify. Though the institutions are non-profits or state-run, the loans are considered private.

State Student Loan Programs, Explained

State student loans are offered by state government agencies. They generally have similar requirements and benefits to federal loans: low, fixed interest rates and flexible repayment plans. Some even offer subsidized (interest-free) loans and a deferred repayment plan. Though some states may waive a credit check, other lenders do require it. Students without a solid credit history may need to consider applying with a cosigner.

State student loans agencies are also unique because they are run not-for-profit and benefit the local community. As a local entity, they tend to be more mission-minded and offer more personable customer service.

These programs may offer a strong alternative for students who have exhausted financial aid and federal student loans.

Recommended: Types of Federal Student Loans

What Are State Student Loan Programs?

State student loan programs vary in scope by state and not all states offer this option. Typically, a state’s department of postsecondary education is responsible for managing the loan program.

Also, terms and eligibility requirements differ from state to state. For instance, Georgia state offers the “Student Access Loan” through the Georgia Student Finance Authority. It’s a 1% fixed rate loan offered exclusively to Georgia residents.

Eligibility is strict, however. Prospective or current students must be enrolled in an institution from one of three university systems in Georgia (University System of Georgia, Technical College System of Georgia or Private postsecondary institutions). A maximum of $8,000 can be awarded per year: up to $36,000 in a college career.

Applying for State Student Loan Programs

Many state student loans’ first step is filling out a Free Application for Federal Student Aid (FAFSA®). According to the U.S. Department of Education, some programs are first-come, first-serve — so it may help to apply early.

To get started, find your state’s department of postsecondary education. The U.S. Department of Education maintains a list of each state’s agency . These departments will be your direct sources of information on loan programs, eligibility, and how to apply. They can direct you to state student loan programs, if any are available.

It’s best to contact your department first for the latest programs. But the Education Finance Council has a comprehensive list of all participating state agencies. It may also be helpful to connect with your financial aid office, as they may have insight into state and college-specific aid opportunities.

If your state does not offer student loans — consider out-of-state agencies that accept out-of-state students like the Massachusetts Educational Financing Authority (MEFA). Massachusetts’ state legislature created MEFA in 1982 to provide low-cost finance alternatives for families and students. They offer undergraduate loans with fixed rates from 5.35% to 7.95% APR, as of July 2023.

Recommended: FAFSA 101: How to Complete the FAFSA

What Can State Student Loan Programs Be Used For?

Borrowers use state student loans for college programs, whether professional, undergraduate, or graduate.

Your “cost of attendance” (COA) is a federal term that defines expenses from your higher ed programs. They can include tuition, room, food, books, and supplies.

State student loans should not be used for sorority and fraternity dues, vacation travel, or non-discretionary dining. Generally, it’s wise to use the minimum required to pay for educational needs in order to pay lower interest fees after graduation.

Tuition

Tuition is the price of the actual education. It covers the cost of your classes and varies by the amount of credits required in your major. Charges will also vary depending on whether the school is public or private, or if students are in-state.

Room & Board

Room and board refers to housing and meals provided on a college campus. Types of housing include dorms or university-owned apartments.

Some students cut substantial costs by living at home and commuting to school. If living at home is not an option, off-campus rentals can also be covered by state student loans. This option may be cheaper, especially if roommates split the rent.

Recommended: Using Student Loans for Living Expenses and Housing

School Supplies & Equipment

Books, laptops, and other educational equipment are also part of COA. It can cover general school items such as pens and notebooks. And, equipment includes degree-specific equipment and gear, such as Adobe software for graphic design majors or cameras for photography students.

Consider buying second-hand books or renting e-books. E-books in general are cheaper than physical textbooks.

Transportation

If your classes are not walking distance — COA covers all local transportation costs such as car, taxi, and public transit. Examples are monthly train passes or gas for your car. Loans cannot be used to purchase a vehicle.

Personal Expenses

These expenses cover daily needs such as toiletries, groceries, laundry, haircuts, and other personal matters while a college student. They can also cover your phone and internet bill.

Dependent Care Expenses

Childcare is included in COA. This includes daycare or babysitters. Determine your aid amount by the number and age of dependents, as well as hours of care needed.

Other Costs Associated with Schooling

Miscellaneous expenses are covered too. Examples might include study abroad programs and special needs equipment. COA also covers general campus fees such as orientation fees, student social activity fees, health insurance fees, and more.

Recommended: I Didn’t Get Enough Financial Aid: Now What?

State Loan Programs vs Private Student Loans

State student loan programs have minor differences from private student loans.

Benefits to state student loans may include a more competitive interest rate or a deferred payment plan. Some programs offer one interest rate for everyone — regardless of credit score. This means everyone accepted into the program is charged the same interest rate regardless of credit history. Minnesota’s Office of Higher Education, for example, offers one 6.35% fixed rate or 2.2% variable rate for all borrowers. Furthermore, the Alaska Commission on Postsecondary Education allows borrowers to defer paying off student loans six months after graduation. Private lenders typically have higher interest rates that are generally determined based on the applicant’s credit history and income, among other factors. Also, private loans may not have deferred repayment plans.

State loan programs usually have a maximum borrowing amount for students. For instance, Georgia’s program awards a maximum of $8,000 per year — while Minnesota’s program awards up to $20,000 per year. Private lenders generally have no cap.

State college loan programs have more strict eligibility requirements for borrowers. The above-mentioned state agencies in Georgia and Minnesota lend only to in-state residents. Georgia has even stricter policies: the schools must be in-state. Alaska’s program however, allows Alaskan residents to use funds for out of state tuition.

Lastly, state student loan programs are not available in every state — whereas there are several private lenders to choose from nationally.

Explore Private Student Loans with SoFi

If you’re short on college cash with financial aid and family contributions, a private student loan can cover the difference. Because they lack the borrower protections offer to federal loan borrowers, such as deferment options, they may be an alternative to consider when all other options have been exhausted.

SoFi’s private student loans are available for undergraduate and graduate students, or their parents. Plus the loans have no fees. Borrowers are also able to choose from four flexible repayment plans.

Students can choose to defer payments up to six months after graduating school, make interest-only repayments, or pay immediately. And, we offer a unique feature that releases co-signers from loan obligations after 24 on-time payments.

Interested in financing your education with a SoFi private student loan? Find out if you qualify within minutes.

FAQ

What are state student loans?

State student loans are non-federal funds offered via U.S. state higher education offices. They generally offer lower interest rates and various benefits to residents. Some state agencies lend nationally.

Are state student loans offered through the government?

State student loans are offered through state-level government agencies — not national (federal) agencies.

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Photo credit: iStock/Nelson_A_Ishikawa

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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If you’re considering borrowing student loans, you may be wondering if it’s possible to get a student loan without a credit history.

It is. You can borrow a student loan with no credit history, and it’s possible to get student loans with no credit check. Federal student loans (except PLUS Loans) don’t require a credit check.

Private lenders do, however, review an applicant’s credit history during the application process. Potential borrowers who don’t have a strong credit history may be able to add a cosigner to strengthen their application, but there are no guarantees.

Federal vs Private Student Loans

Student loans fall into two general categories: federal (offered by the government) and private (offered by banks and other lenders). There are options under each category that range from different eligibility requirements to fixed vs. variable interest rates. You can learn more about private vs. federal student loans in this student loans guide.

Types of Federal Student Loans

If you’re searching for “student loans, no credit check,” federal student loans (aside from PLUS loans) fit that description. Federal student loans are funded by the U.S. Department of Education and are based on education costs and your current financial situation, not your credit history.

The most desirable type of federal loan, the Direct Subsidized Loan, has relatively low fixed interest rates that are set each year by the government.

Subsidization means that the government will pay for any interest that accrues on the loan while you’re in school at least half-time, as well as during your grace period and some deferral periods. Direct Subsidized Loans are awarded based on financial need and are only available to undergraduate students.

The other type of no-credit-required federal loan is the Direct Unsubsidized Loan. It also typically has low interest rates, but no subsidy means the interest starts to accrue as soon as the money is loaned, and borrowers are required to pay the interest that accrues. Unsubsidized loans are available to students at all levels of higher education and are therefore one of the most accessible types of student loans.

One advantage with both these types of federal student loans is repayment flexibility, including deferment, income-driven repayment plans, and forgiveness programs like Public Service Loan Forgiveness. If you’re trying to build or improve your credit score, repayment options that could help keep you out of default are key.

Private Student Loans

Students also have the option of applying for private student loans, including graduate loans, which are available through some banks, credit unions, or private lenders. The terms can be very different depending on the type of loan, whether you choose a fixed or variable interest rate, and your financial history — which includes things like your credit score.

If you have less-than-stellar credit, or not much of a credit history and income, you’ll likely need to apply with a cosigner, typically a family member or a close friend who guarantees to repay the loan in the event that you can’t. It’s important to choose a cosigner wisely. It should be someone with a solid financial history that you trust.

💡 Quick Tip: Fund your education with a low-rate, no-fee SoFi private student loan that covers all school-certified costs.

Applying for Student Loans With FAFSA®

To start the federal student loan application process, fill out the FAFSA® (Free Application for Federal Student Aid). Filling out the FAFSA is free, and it doesn’t commit you to any particular type of loan. The FAFSA is also the tool used by many schools to determine a student’s full financial aid award, including scholarships, grants, work-study, and federal student loans.

You can explore student loan and scholarship information for more ways to help cover the costs of college.

Applying for Private Student Loans

To get a private student loan, potential borrowers will apply directly with the private lender of their choosing. Each loan application may vary slightly by lender as will the terms and interest rates. Private student loans don’t have the same borrower protections that federal student loans offer, such as income-driven repayment plans or deferment or forbearance options. Therefore, they’re generally considered as a last resort, after all other sources of aid have been exhausted.

Parent PLUS Loans

Students aren’t the only ones who can apply for federal financial aid. Parents of undergrad students that are enrolled at least half-time can apply to receive aid on their behalf via the Parent PLUS Loan.

This is another type of unsubsidized federal loan, but it’s more restrictive in that both parents and children need to meet the minimum eligibility requirements. This type of federal student loan requires a credit check.

Like private loans, borrowers who don’t have optimal credit history may apply with a cosigner to guarantee a PLUS loan. And students are still typically able to seek additional unsubsidized loans for themselves to cover any gaps.

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

Tips for Building Credit

Entering college can be a smart time to start establishing credit. A borrower’s credit score could mean the difference between getting a good deal on a loan, or not getting a loan at all. Even a few points higher or lower might impact the interest rates a borrower may qualify for.

There are a number of sites that let you see your credit score for free and offer notifications if there are changes, so it’s easy to keep track of where you are.

The number that signifies “good” credit is between 670-739 for FICO Scores®. These scores are determined by factors such as the number of credit accounts a person has and how they are managed. One way to start building credit is to open some kind of credit account, and then make regular payments.

Paying bills on time, the credit mix you have, and your credit utilization ratio may all play a role in determining a credit score. While everyone’s circumstances are unique, try to make bill payments on time. Another general rule of thumb to aim for is to keep the credit utilization ratio under 30%.

The Takeaway

Most federal student loans do not require a credit check and may be considered no credit check student loans. They are available to borrowers with no credit history. Parent PLUS loans are one exception as they are federal student loans that do require a credit check.

Private student loans also require a credit check. Students with a limited credit history may have the option to apply with a cosigner if they are interested in borrowing a private student loan. As noted earlier, however, adding a cosigner does not necessarily guarantee approval for a loan.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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