If you’re like most college students, you’ll need to borrow money to pay for school — so it’s important to know all the student loan requirements you will face.
Student loans have some of the least restrictive requirements for any type of loan. It’s actually kind of astounding just how easy it is for a teenager to take out tens of thousands in student loan debt.
But while those requirements may be minimal, they’re still non-negotiable. If you want to qualify for a student loan — either federal or private — you’ll need to follow the guidelines detailed below.
All the requirements for federal student loans
Contrary to popular belief, there is no income or net worth limit to qualify for a federal student loan. The federal government provides loans to any student who qualifies, no matter their family’s financial situation. However, students who do have significant financial need will be eligible for federal grants, work-study, and subsidized loans, in addition to the unsubsidized loans that are available to all.
FAFSA, the first student loan requirement
To become eligible for a federal student loan, you have to complete the Free Application for Federal Student Aid (FAFSA) before the application deadline. For the 2021-22 school year, the FAFSA became available on October 1, 2020 and is due June 30, 2022. Students who don’t fill out the FAFSA or who submit an incomplete FAFSA will not qualify for financial aid.
The FAFSA will ask for your family’s financial information, including:
- Annual income
- Bank statements
- Investment assets
- Information from a previous tax return
Students and parents must both submit basic information like their birth date, address, contact information, and Social Security number.
When filling out the FAFSA, students will have to create an FSA ID to log onto the Department of Education website. Keep this FSA ID written down somewhere safe so you can reference it later on.
Citizenship status for federal student loan requirements
Students need to be citizens or have lawful immigration status to qualify, but their parents may be undocumented. They also need to have a high school diploma or GED to receive financial aid.
Deferred Action for Childhood Arrivals (DACA) students with a Social Security number cannot receive federal aid. However, they may still qualify for state-based grants, scholarships, and in-state tuition.
Enrollment minimums and other requirements for federal student loans
To receive federal loans, students must be attending an eligible college or university at least part-time, which usually equals six credit hours.
Male students need to be registered with the Selective Service to qualify for federal student loans. If they’re not registered, they can sign up while filling out the FAFSA.
Students have to complete the FAFSA every year in order to receive financial aid. After the first year, students must be in good academic standing to qualify for federal aid. If your GPA falls below 2.0, you will no longer qualify for federal student loans.
After you’ve filled out the FAFSA, the university or college you decide to attend will determine how much financial aid you qualify for.
Another benefit to filling out the FAFSA is that you’ll be eligible for university-based scholarships and grants. Most colleges won’t hand out scholarships unless you’ve filled out the FAFSA, even for merit-based awards.
How to qualify for a private student loan
Students who don’t qualify for a federal student loan or who max out their federal loans can apply for one or more private student loans. Getting a private student loan usually takes around three weeks from start to finish, which is faster than a federal loan.
Each private student loan company has its own particular set of requirements, but most require the following:
- Full legal name, birthdate, and contact information
- Social Security number
- Proof of income or financial assets
Financial requirements for private student loans
Because most students don’t have a steady income, many private loan companies require a cosigner, another individual who will take financial responsibility if the original borrower defaults on the loan. The cosigner will also have to provide the same identifying information and proof of income, like a recent pay stub or tax return.
[Callout quote box: Funding U makes no cosigner student loans based on your potential. Find out more about our lending process and the requirements for our no cosigner student loans.]Traditional private lenders usually have a minimum income threshold, often between $30,000 and $40,000. If you or your cosigner has an income that falls below that figure, you will likely be denied by typical private loan companies. In this instance, you can find a new cosigner or apply for a no-cosigner student loan like ours.
Credit scores matter for all private loans
One major difference between federal student loans and private loans is that private lenders will run a credit check before approval. They may deny your request based on your or your cosigner’s credit score, which usually needs to be 670 or higher. You may also be rejected if either of you have a recent bankruptcy, default, or collection on your credit report.
No cosigner student loans from Funding U
At Funding U, we make no cosigner student loans directly to college students. We don’t look at your parents’ credit; we look at you, your academic progress, and your financial plan. Apply online.
Check out our latest blog posts for tips and useful info about managing money in college, navigating the job market, and more.
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