College Planning & Financial Aid
Getting a Student Loan

When to Apply for Student Loans

July 8, 2019


In 2018, about 69% of all college students took out some type of student loan. This statistic, which includes both private loans and federal student loans, demonstrates how much students rely on this type of financial assistance to attend college.

But student loans don’t automatically appear, even if you’re more than qualified to receive them. Finding and applying for student loans is a very specific process that, while maybe enabling you to attend the school of your choice, also obligates you and your cosigner (if applicable) to repay a debt. To get the financial assistance you need, below are some critical steps to follow.

Applying for Student Loans: An Overview of the Process

The application process involves more than just filling out and submitting an application. You need time to choose between private and federal student loans, as well as to research different lenders and compare interest rates and terms. As a result, you should try to begin the process as soon as possible.

Once you’ve chosen your school, make sure that you’ve applied for any scholarships, grants, and need-based aid that you may be eligible for. Your goal should be to get as much “free” funding as possible before pursuing student loans to close the remaining gap for the cost of your education.

Step 1. Explore Federal Options

In most cases, you should apply for federal student loans first. You can apply for the FAFSA (Free Application for Federal Student Aid) online to begin the process of getting a federal student loan. The FAFSA is not itself a loan. It’s a federal application that determines your eligibility for federal and state financial aid programs. At many schools, you have to fill out the FASFA so the school can determine your eligibility for need-based aid, such as scholarships or grants. It will also determine what your expected family contribution (EFC) is towards your school expenses. Finally, it will also determine your eligibility (and how much you’re eligible for) for a federal student loan, both subsidized and unsubsidized.

Online applications for federal student loans are typically due at the end of June each year. However, each college may have its own deadline. A list of state deadlines is available on the FAFSA website. Since the FAFSA allows you to list up to six schools on your application, make sure you know the deadlines for each one.

If you know you don’t have the resources to pay for an upcoming semester and you’ll need a student loan, make sure to apply before the beginning of your semester. When preparing for the fall semester, try to fill out your loan applications early in the summer. If you plan to attend school in the spring, fill out loan applications early in the fall. You should give yourself more time than you need to complete FAFSA and you may need help from your parents or guardians. It asks for a lot of detailed financial information you may not have readily available, and doing it at the last minute can be stressful.

Step 2. Prepare Yourself for Private Student Loans

Once you’ve finished applying for your federal student loans and seeing what you qualify for, if you’re still short of what you need to attend school, you can look into private student loans. These loans are typically offered by private companies such as banks and credit unions. If you still need money for college after you receive your mix of scholarships, grants, and/or federal loans, private student loans can help fill your funding gap.

Before you apply for private loans, calculate exactly how much money you still need. Take the cost of attending school and subtract your financial aid awards, grants, scholarships, you or your family’s out of pocket contribution, and federal loans. The remainder is the amount of private student loan funding you may need to make up the difference.

Make sure you have your finances in order before you apply for any private student loans. Unlike federal loans, private loan rates and terms may be based on your or your cosigner’s credit profile. If you don’t have an extensive credit history of your own, you can apply with a cosigner who has a more extensive (and preferably good) credit history. This will increase your chances of getting better loan terms.

The majority of private student loans are co-signed since most incoming students haven’t developed a long enough history of using and paying back credit. As a student, your cosigner will probably be your parent or guardian – but before you assume, make sure that person accepts the responsibility of becoming your cosigner since they’ll be obligated to pay back the loan if you can’t.

Step 3. Applying for Private Student Loans

Since private student lenders are not restricted by things like completing the FAFSA or semester dates, you can take out a private loan at any time. You can even apply mid-semester if you need to. However, don’t apply for private student loans solely because you can. Apply for them depending on your actual need. Review any award letters about federal loans or scholarships very carefully. Then, keep a running total of how much money you still need and apply for loans to cover those differences.

While private student loans can have competitive interest rates, they generally accrue interest from the time they are disbursed to the school and accumulate interest throughout the term of the loan. There is no “one size fits all” approach to applying for private student loans. You must gain a complete understanding of your own financial situation to make the appropriate decisions about loans.

Step 4. Verify that Everything is in Order

Finally, go back through everything you applied for and monitor the progress of those applications moving forward. When applying for the FAFSA, for example, you can check the status almost immediately after submitting it online. If you mailed in your application, you can check the status between seven and ten days after the date it was mailed by logging into your account on the website. This way, you can make sure that you’ll be receiving the money you’re entitled to and have time to correct any errors, if necessary.

How you receive the funds will vary depending on the type of loan you’re taking. Some private student loans will deposit money directly into your bank account. In this case, verify with your bank that you’ve received the correct amount of funding. Other loans go directly to your college, like many federal loans and certain private student loans (including the ones offered by lenders on LendKey’s website). Call your school’s administrative office to verify that they received the funds and that your account is in good standing. In many cases, you can see if the loan has been disbursed to the school through the school’s website.

If you encounter any type of problem, take steps to correct it immediately by contacting your school or your lender. If you don’t have access to your funds through your bank account, call the loan provider and correct any errors to avoid a delay in disbursement. Make sure to take care of issues after your loan applications have been approved and before the first week of classes begins.

An Investment in Your Future

It’s important to understand that applying for student loans is a proactive process. Finding, filling out, and submitting a student loan application isn’t necessarily something that you can do in a single afternoon. You need to do your research to secure access to the money you need for your education. At the same time, you want to guarantee that the finance side of your educational journey is in order.

Because of that, it’s important to make every effort to stay on top of the process and manage your loans. For the best results, you should always start this as soon as you can. If nothing else, it will give you an opportunity to relax and enjoy the rest of your summer. This by itself can make the effort more than worth it.

If you have any additional questions about when to apply for student loans, or if you’d just like to discuss the specifics of your own situation with someone in a bit more detail, please feel free to reach out to LendKey.

Please note that the information provided on this website is provided on a general basis and may not apply to your own specific individual needs, goals, financial position, experience, etc. LendKey does not guarantee that the information provided on any third-party website that LendKey offers a hyperlink to is up-to-date and accurate at the time you access it, and LendKey does not guarantee that information provided on such external websites (and this website) is best-suited for your particular circumstances. Therefore, you may want to consult with an expert (financial adviser, school financial aid office, etc.) before making financial decisions that may be discussed on this website.