I'm trying to figure out how student loans work as I start planning for college. Can anyone explain who is eligible to receive student loans? I'm a bit worried about affording college and just wondering if there's any chance that I might qualify for them.
I've heard different things about government-backed loans versus private loans, and I'm not sure which one I should even be looking at. Does anyone know if international students have different criteria, or if there's something specific I need to focus on as a U.S. citizen? I want to understand what I need to do to qualify and what the whole process entails. Any advice would be much appreciated!
Understanding student loans is an important aspect of planning for college, so your question is quite pertinent. In terms of who is eligible to receive student loans, the primary dividing point is whether the loans are federal or private.
Federal student loans, which are backed by the U.S. government, have specific eligibility requirements. To qualify, you must:
1. Be a U.S. citizen, a U.S. national, or an eligible non-citizen
2. Have a valid Social Security Number
3. Be enrolled or accepted for enrollment in a degree or certificate program as a regular student
4. Have satisfactory academic progress in college or career school
5. Not owe a refund on a federal student grant or be in default on a federal student loan
6. Register (or already be registered) with the Selective Service System, if you’re a male between the ages of 18 and 25
7. Finally, you will need to complete the Free Application for Federal Student Aid (FAFSA) for each academic year you wish to receive aid.
Private loans, on the other hand, come from entities such as banks, credit unions, and other financial institutions. The criteria for private loans usually involve creditworthiness or having a co-signer with a good credit score. They may have higher interest rates and less favorable terms compared to federal loans.
As for international students, they are not eligible for federal student loans, but they may qualify for private loans. Some private lenders offer loans to international students, but these often require a co-signer who is a U.S. citizen or permanent resident.
Remember, it's recommended to exhaust your options with grants, scholarships, and federal loans before turning to private loans due to the potentially higher cost. Ensure you fully understand the terms of the loan agreement before signing onto any debt obligation.
When applying for colleges, also check out their net price calculators to get a rough estimate of your financial aid package so you have a clear picture of your potential college costs. This can help guide your borrowing decisions as well!
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