FAQs About Student Loans

Student loans are a big part of paying for college for many students, and with such importance comes a lot of questions. Here are some FAQs about student loans.

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Should I apply for scholarships, loans, or grants first?

The best strategy is to first apply to all grant and scholarship opportunities that you are eligible for and only then apply for loans to cover the deficit. This is because grants and scholarships are free money. You do not have to return the money, neither do you have to pay any interest on the money you receive from these sources. Loans, on the other hand, attract interest that will keep accruing until you have finished clearing the full loan amount.

While you can go out and apply for all the scholarships that you qualify for, you need to be more conservative when applying for loans. Only apply for what you need to cover the cost of education for that year so that you can graduate with the minimum debt possible.

Where do I start if I want to apply for a federal student loan?

First off: Make sure you’ve exhausted all of your financial aid opportunities first.  A student loan should be a last resort, as it has a lasting impact on your life.

File the FAFSA form. FAFSA stands for Free Application for Federal Student Aid. The details you provide in this form determines how much financial aid you are eligible for during that academic year. If you do not submit the FAFSA, you will not be eligible to apply for any type of federal student loan.

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Where can I get the FAFSA form?

FAFSA forms are available for free online at the FAFSA site. You can also get these forms from the public library, your high school’s guidance office or your college’s financial aid office.

Is there a deadline for submitting the FAFSA to a school?

Every college has its own specific deadline for submitting this form depending on the time they require to process the information and determine aid eligibility for all the applicants. You will have to check the deadlines for all colleges you are applying to and make sure to submit the form as early as possible.

How long does it take for loan applications to be processed?

It takes the authorities about 4 to 6 weeks to process and review an application. Applications submitted online process much faster than applications sent via traditional mail or courier.

How do I receive the financial aid offered to me?

In most cases, the money is sent to your college’s financial aid office directly. They will receive the money by the beginning of the academic term. However, this may vary from one college to the next so it is important to get the exact details from your college’s financial aid office.

Is there any difference between federal and private student loans?

Yes, there is a huge difference between the two. The Federal Government Department of Education offers federal student loans, while non-federal financial institutions, such as banks and private lenders, offer private student loans.

Federal student loans offer much better terms as compared to private student loans. With a federal loan, you get the benefit of multiple repayment options and lower rates of fixed interest. With a private student loan, the interest rates may be fixed or variable and in both cases, they are considerably higher than the federal student loan interest rates.

Are federal student loans a one-time thing or do I have to apply for a loan every year?

Federal student loans are not a one-time thing. They are recurring but in order to avail of recurrent financial aid, you will need to complete the FAFSA form every year while you are in college. After determining your new aid eligibility, the college will give you a new financial offer letter. If you do not apply for it every year, you will not get any aid.

My parents earn a decent income. Does this disqualify me from getting any financial aid?

Household income is not the only factor that is taken into consideration when calculating the amount of financial aid you are eligible for. Besides, there are several different types of loans designed for families for different income levels.

It is worth filing the FAFSA regardless of your parents’ income so you can still avail of whatever financial aid you are eligible for. Remember, if you do not file the FAFSA, you forfeit access to all financial aid, regardless of any other factors.

Will taking a student loan impact my credit score negatively?

Not necessarily. You can actually use student loans to improve your credit by making all of your payments on time. However, if you make late payments or miss multiple payments, your credit score does get impacted.

Who do I speak to if I have any questions about my federal student loan?

The federal government does not manage federal student loans directly. Instead, they assign the management of the loans to various loan servicers. When you receive a federal student loan, a loan servicer assigned to you will answer all your loan-related questions. They are essentially your point of contact for any help you require. Usually, the loan servicer assigned to you will contact you directly after you receive your first loan disbursement.

How are student loans different from personal loans? Which is a better option?

Students receive student loan offers purely on the basis of financial need. Students are not required to have any credit history, neither are they required to provide any collateral for taking the loan—though they will likely have to have a co-signer. The student’s higher education and future earning potential are considered as collateral for taking a student loan.

Getting a personal loan is not so easy. You will need to provide some collateral, such as your car or your home, which is considered the property of the lender until such time that you pay back the entire loan.

Another very important difference is that the interest rates for student loans are much lower than the interest rates for personal loans.

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Lender Rates (APR) Eligibility
Citizens logo.
6.36%-14.25%* Variable
4.48%-13.29%* Fixed
Undergraduate and Graduate
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
Credibe company logo.
4.98% - 16.70% Variable
4.09% - 15.71% Fixed
Undergraduate and Graduate
Lendkey company logo.
5.84% - 11.11% Variable
4.39% - 11.11% Fixed
Undergraduate and Graduate
Ascent company logo.
6.16% - 16.09% Variable
4.09% - 15.71% Fixed
Undergraduate and Graduate
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
Earnest company logo.
5.62% - 16.20% Variable
4.11% - 15.90% Fixed
Undergraduate and Graduate
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.