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Top Student Loan Questions

• What type of student loan should I choose?
  • Always use federal loans first, such as Stafford, Parent PLUS, and GradPLUS loans. They are backed by the government and carry lower, fixed interest rates and often have better terms than private (or alternative) loans. You must file the FAFSA to qualify.
  • If you need to use private student loans, consider all of the costs. Private loans are variable, credit-based loans offered by private lenders and usually require a co-signer. They can have origination fees, different ways of compounding interest, and variable interest rates. It pays to compare private loans and find the most competitive terms.
• How much can I borrow?
  • The borrowing limit varies across the different loan types.
  • Stafford Loans limits vary by year in school and student status. Review limits.
  • For Parent PLUS loans and GradPLUS Loans, you can borrow up to the cost of attendance minus any financial aid received by the student.
  • For private student loans, you can borrow up to the cost of attendance minus any financial aid. In some cases lenders may offer private loans in excess of this amount, but this is not advised because it will reduce need-based aid and will unnecessarily increase the student's loan burden.
• Should a parent co-sign the loan?
  • Federal loans (Perkins, Stafford, and GradPLUS) do not require a parent co-signer. However for private loans, if you are a student borrower without an established credit history and a current, steady income, you WILL need a co-signer. Your co-signer must have "good" to "excellent" credit.
• Will there be a credit check?
  • Perkins and Stafford loans do not require a credit check. GradPLUS and Parent PLUS loans require a credit check for adverse credit only (bankruptcy, default on a previous federal student loan, etc.), not for a particular credit score. Private loans do require a credit check, and rates may depend on the students and/or co-signers credit score.