Student Loans

When should you begin applying for student loans?

By
Social Links for Anna Baluch ,
edited by
Social Links for Jared Hughes
Updated June 27, 2023, 7:48 p.m. ET
A young woman tries to balance finances and education.
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It can be stressful to apply for student loans. But if you get organized, you can make the process easier on yourself.

You can apply for student loans as far as a year before you start school. While applying as early as possible is ideal, you can still get loans if you’ve missed deadlines. 

Here’s what you need to know about when to apply for student loans, both federal and private.

Deadlines to consider

If you need student loans to help pay for college, you should be aware of a few deadlines to keep in mind, including the Free Application for Federal Student Aid (FAFSA) deadlines and state deadlines. It’s a good idea to explore federal student loans before private student loans so you can lock in some benefits, like income-driven repayment plans and student loan forgiveness. The first step to getting federal loans is completing and submitting the FAFSA. 

FAFSA deadlines

Do your best to fill out the FAFSA as soon as you can. It will be available for you to complete on Oct. 1 for the following academic year through June 30. Do your best to meet the deadline or you might miss out on federal financial aid. 

State deadlines

Each state has its own deadlines, which may be earlier than the federal deadline. That’s why it’s important to review and find out the deadline in your particular state. 

For example: The deadline in California for the 2022-2023 academic year was March 2, 2022, a full year before the last federal deadline. So it’s crucial to be aware of your state’s deadlines.

What types of federal student loans are available?

You can choose from several types of federal student loans, including: 

  • Direct Subsidized Loan: If you’re an undergraduate student with financial need, you might qualify for subsidized loans. To determine financial need, the government will use a formula with the information you provided on your FAFSA. With a subsidized loan, you won’t have to worry about interest while you’re in school at least half-time, during the six-month grace period after you leave school, and during deferment periods. A credit check is not required to take out this type of loan. 
  • Direct Unsubsidized Loan: You may be eligible for unsubsidized loans if you’re an undergraduate or graduate student, no matter what your financial situation may be. The major difference is that interest will accrue while you’re still in school. You don’t have to go through a credit check for this type of loan either.. 
  • PLUS Loans: PLUS loans are designed for parents and graduate students. These loans differ from subsidized and unsubsidized loans in that they require a credit check. Two types of PLUS loans are available, Grad PLUS for grad students and parent PLUS for the parents of undergraduates. PLUS loans can help you out if you still need funds to pay for your education after you borrowed the maximum limit of subsidized and unsubsidized loans.

What’s the maximum amount I can borrow with a federal student loan?

The maximum amount you can borrow with a federal student loan depends on your unique situation, and the type of student (or parent you are).

  • Direct Subsidized Loans: You can borrow up to $23,000 as a dependent student and $65,500 as an independent student. 
  • Direct Unsubsidized Loans: If you’re a dependent student, you may be eligible for up to $31,000 between both subsidized and unsubsidized loans. If you’re an independent undergraduate student, you’re limited to $57,000 between both types of loans. As an independent graduate student, you may borrow a total of $138,500.
  • PLUS Loans: You can qualify for a PLUS loan for up to the cost of your school’s attendance, which will be determined by your school itself. But borrowing this much isn’t necessarily a good idea since you’ll have to pay it all back.

What happens if I miss the federal student loan application deadline?

Don’t worry if you miss the federal student loan deadline. There may still be options available to you. You can check with your financial office to find out if there are any scholarships, grants, or assistance accepting applications. Additionally, you can apply for private student loans at any time.

Deadlines to consider when applying for private student loans

Before you turn to private student loans, be sure to exhaust your federal student loan options. You can always opt for private student loans to bridge the gap if you don’t have enough in federal student loans to cover your education costs. If you do go the private student loan route, note that you’ll likely need a cosigner to qualify. 

Since private loans are given out by private lenders, you can apply for them at any time. But it takes time to actually get the money so you’ll still want to apply as early as possible. While the application process can be quick, it can take 7 to 10 days to certify your loan. Also, you might have to wait two months to actually receive your funds.

When to consider using private student loans

Before you go ahead and take out private student loans, consider the following:

  • Your credit matters: Most federal student loans don’t require a credit check. But if you don’t have the best credit, it might be difficult to qualify for a private student loan, especially without a cosigner.
  • No income-driven repayment plans: Federal student loans offer income-driven repayment plans, which base your payments on your income. You won’t get this perk with private student loans.
  • Loan forgiveness is not available: If you work in a certain field for a specific amount of time and have a federal student loan, your loan may be forgiven. A few examples of federal student loan forgiveness programs are Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness. Private loans don’t offer forgiveness. 
  • Potentially higher interest rates: Rates for federal student loans are set by Congress and can fluctuate from year to year. Since private student loan rates depend on factors like your credit, repayment term, and whether you have a cosigner, you might have to settle for higher rates.
  • Might not get a grace period: Most federal loans have a guaranteed six-month grace period after you graduate or leave school before you have to start making your monthly payments. This isn’t necessarily the case with private student loans so you may have to start paying them back right away. 
  • May be ineligible for deferment or forbearance: Federal student loans come with protections like federal deferment or forbearance. You may not get those protections with private student loans. 
  • Loans can go into default quickly: If you don’t make payments on your federal student loans, they may go into default and damage your credit after 270 days. This period is usually much sooner with private student loans. 

When to apply for private student loans

Do some research and shop around before you choose a student loan from a private lender. Compare the rates, repayment terms, and fees of all your options. Once you find one that meets your budget and needs, you can apply for the student loan at any time. Here’s how. 

  1. Gather documents: Most lenders will ask you for basic personal and financial information as well as some documents. Be sure you have your Social Security number, the list of schools you’d like to attend, your government-issued ID, and your tax returns available.
  2. Consider a cosigner: If you have no credit or bad credit, you might not qualify for a private student loan without a cosigner, which can be a family member or close friend. A cosigner can not only increase your chances of approval, they might also help you secure a lower interest rate.
  3. Prequalify: Some lenders let you prequalify and check your rates and terms for free without any impact on your credit. By doing so, you can get a better idea of the right private student loan for your unique situation. 
  4. Apply: You can usually apply for a private student loan online, on the lender’s website. Be prepared to share personal and financial details. You’ll also be required to submit some documents and choose a repayment option.
  5. Get funded: Each private lender has their own rules for approving loan applications. The good news is most of them offer quick approvals and funding. You might be able to get your funds faster from a private loan than you would with a federal loan.

Can I apply for private student loans mid-semester?

When you apply for federal student loans, you must meet deadlines set forth by FAFSA and your state. But private student loans are more flexible. You can apply for them at any time of the year, even mid-semester.Â