The best type of student loan depends on your situation. But for most borrowers, it's a good idea to exhaust federal student loan options before taking out a private student loan. In fact, 85% of student loans in the 2022-23 academic year were federal, according to the College Board.
- Federal student loans are backed by the U.S. Department of Education and come with federal protections that private lenders don't offer, like access to loan forgiveness programs and income-driven repayment plans.
- Private student loans are issued by private institutions such as online lenders, banks, and credit unions. You can use these loans to fill in any funding gaps after you've exhausted federal loan options.
While you can pay for college with both federal and private loans, it’s important to note that there are several types of student loans within each category. Here’s an overview of your options and how to borrow wisely.
| | | | |
|---|
| | | | |
| Undergraduates with proven financial need | All undergraduates and graduates | Graduate students; Parents of undergraduates | Varies, but typically need good credit and stable income |
| | 5.50% for undergraduates; 7.05% for graduates | | |
| | | | Typically none; varies by lender |
| | | | |
| Interest subsidized until 6 months after leaving school; access to federal benefits | Financial need not required; access to federal benefits | Borrow up to school’s total cost of attendance; access to federal benefits | Fewer fees, higher loan limits, borrowers with excellent credit may qualify for lower rates |
| Must show financial need to qualify; lowest borrowing limits | Interest accrues while you’re in school; borrowing limits apply | Requires a hard credit pull that checks for adverse credit | No access to federal benefits; requires a hard credit pull, may be more expensive if you have poor credit |
There are four main types of federal student loans that can each be accessed by filling out the Free Application for Federal Student Aid (FAFSA). Most types of federal loans don’t require a credit check, and everyone who qualifies for a given loan in the same academic year receives the same fixed interest rate.
All federal student loans offer a range of protections and benefits for borrowers. Among these are income-driven repayment plans such as SAVE, PAYE, IBR, and ICR, which set your payments at a percentage of your income and can ultimately lead to loan forgiveness. You also have access to temporary relief programs such as deferment and forbearance if you're experiencing temporary financial hardship.
Good to know:
Federal student loan interest rates are set by Congress and based on the yield of 10-year U.S. Treasury notes, plus a fixed margin that varies based on the loan type.
Direct Subsidized Loans are exclusively available to undergraduate students with proven financial need. These loans are considered the most affordable type of student loan because the government pays for interest while you’re in school and during the six-month grace period after graduating. To determine your eligibility for subsidized loans, you’ll need to submit the FAFSA. Your school will then use the information you provide to assess your financial need. It will take into consideration your family’s income, assets, and state of residence as well as your school’s total cost of attendance. Your credit score and history are not considered. The total amount you can borrow via subsidized loans for your undergraduate studies is capped at $23,000, but annual limits also apply.
Direct Unsubsidized Loans are considered the most accessible type of student loan because they’re available to undergraduate, graduate, and professional students, regardless of financial need and credit standing. Unlike subsidized loans, borrowers are responsible for paying interest that accrues daily from the date of disbursement.
Unsubsidized loans also come with borrowing limits: Dependent undergraduates can borrow up to $31,000 to fund their studies, while independent undergraduates can borrow up to a total of $57,500. Graduate students can borrow up to $138,500, but that includes both undergraduate and graduate loans. Annual limits also apply.
Check out: Subsidized vs. Unsubsidized Student Loans
Direct PLUS Loans have the highest interest rates among federal student loans, but they allow borrowers to cover up to the full cost of attendance, unlike other federal loans. There are two types: Parent PLUS loans for parents of dependent undergraduates, and grad PLUS loans for graduate or professional students. Direct PLUS Loans require a credit check that screens for adverse credit history. However, borrowers with adverse credit may still qualify by securing an endorser or submitting evidence of extenuating circumstances.
If you're juggling multiple federal loans and want to streamline your monthly payments without giving up federal benefits, you can consolidate your federal loans with a Direct Consolidation Loan. You can apply for a Direct Consolidation loan after you graduate, leave school, or drop below half-time enrollment. Once you’ve consolidated, the interest rates on your loans are averaged together and rounded up to the nearest one-eighth of a percent.
If you've maximized your federal student loan options and still need funding, private student loans can bridge the gap. These loans are credit-based and require meeting specific income and credit criteria set by the lender. While private loans offer fewer benefits and protections than federal loans, they may offer lower interest rates if you or your cosigner have strong credit. Unlike federal loans, you can refinance private student loans to potentially reduce your interest rate.
Good to know:
Most lenders require a minimum FICO score of 670 to qualify for a private student loan. A credit score in the high 700s is generally needed to access the best rates.
These loans are designed specifically for undergraduate students. If you have a thin credit profile, (most dependent undergraduates do) you'll likely need to apply with a cosigner. A cosigner is usually a parent or a family member who agrees to repay the loan if you're not able to. When you apply with a cosigner, the interest rate you get will be based on their income and credit score. You may also be able to lower your rate by opting for a shorter repayment term. Private lenders usually offer repayment terms between 5 and 20 years.
Check out: Best student loans without a cosigner
Some lenders offer private loans specifically for graduate students, which may allow higher borrowing limits compared to undergraduate loans. For borrowers with excellent credit, private graduate loans may be a better option than federal grad PLUS loans, since you may be able to secure a lower interest rate. Either way, it’s generally best to start with federal unsubsidized loans for graduate school for their benefits and low-fixed rates.
Some private lenders provide parent student loans, which are a competitive alternative to federal parent PLUS loans. That’s because parents with strong credit may find better interest rates in the private market. Consider pre-qualifying with multiple private lenders to get an estimated rate. From there, you’ll be able to determine whether a parent PLUS loan can offer you a better rate.
An MBA loan is an option if you're pursuing a Master of Business Administration degree. You can use federal loans for your MBA, which are generally recommended before private options. Like other private student loans, rates and terms vary. Lenders that offer MBA loans include Sallie Mae, College Ave, Citizens Bank, Ascent, and SoFi.
Many lenders also provide specialized medical school loans, often with significantly higher limits to accommodate the higher cost of medical education. For example, Citizens Bank allows medical students to borrow up to $350,000, compared to its $150,000 limit for other graduate degrees. Additionally, some lenders, like College Ave, offer extended repayment terms for medical professionals—up to 20 years, versus 15 years for other student loans, to help manage monthly payments.
Private law school loans are tailored to students pursuing a legal education. These loans can come in handy when federal loans and scholarships aren’t enough to cover the full cost of your law degree. Private lenders that offer law school loans include Ascent, Sallie Mae, Citizens Bank, SoFi, and College Ave. Some lenders like Sallie Mae and College Ave also offer Bar Study Loans that can help cover exam and test prep fees, as well as living expenses for recent law school grads.
Advertiser Disclosure$1,000 up to 100% of school-certified cost of attendance
Overview
Sallie Mae offers a wide range of loans tailored to different needs, including those for undergraduates, graduates, MBA programs, law school, medical school, and health profession programs. It's also one of the few private lenders that provides loans for career training and trade schools.
If you apply with a cosigner, you might qualify for a lower interest rate. Sallie Mae has one of the shortest cosigner release periods—just 12 months—compared to other lenders. However, there's no option to prequalify and check your rates without affecting your credit. You'll need to complete a full application, which includes a hard credit inquiry that could temporarily lower your credit score.
pros
- Offers loans for certificate and trade school programs
- Cosigners can be released after just 12 months
- No prepayment, origination, or application fees
cons
- No prequalification options to check rates
- Must submit an application to view loan terms
- Does not offer parent loans
Loan terms
10 to 15 years for the Smart Option Student Loan; 15 years for law school, MBA, and graduate school loans; 20 years for medical school loans
Loan amounts
$1,000 up to school-certified cost of attendance. Student must be listed as the borrower, and a parent may cosign.
Cosigner release
After you graduate, make 12 one-time principal and interest payments, and meet certain credit requirements
Eligibility
Must be a U.S. citizen or permanent resident enrolled in an eligible program. Noncitizens residing and attending school in the U.S. may qualify by applying with a creditworthy cosigner, who must be a U.S. citizen or permanent resident, and providing an unexpired government-issued photo ID.
$1,000 up to 100% of the school-certified cost of attendance
Overview
College Ave offers a simple three-minute application, and has loans for nearly every borrower, from undergraduates to law school students. It's a great option for graduate students, who can take advantage of extended grace periods. The lender offers multiple repayment plans, as well as a discount of 0.25 percentage points for autopay.
With College Ave's multiyear approval program, 95% of undergraduate students who apply with a cosigner are approved for additional student loans. On the downside, borrowers must complete at least half of their repayment term before they can release a cosigner. Parent borrowers also can't fully defer loans - they must pay at least the interest during school.
pros
- Graduate loans have grace periods up to 36 months
- Offers multiyear approval for efficient borrowing
- Discount of 0.25 percentage points for autopay
cons
- Cosigner release only available after half of your repayment term
- Parents can’t defer interest payments while child is in school
- Doesn’t disclose minimum credit score or income
Loan terms
5, 8, 10, or 15 years for most borrowers (law, dental, medical, and other health profession students have up to 20 years)
Loan amounts
$1,000 minimum up to your school’s annual cost of attendance; lifetime limits depend on your degree and credit profile
Cosigner release
Available after more than half of the scheduled repayment period has elapsed and other requirements are met
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. International students with a Social Security number and a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
$1,000 up to cost of attendance
Overview
ELFI is a private student loan lender offering private student loans and refinancing for undergraduates, graduates, and parents. The lender, a division of Tennessee-based SouthEast Bank, offers loans starting at $1,000, with options to cover as much as the full cost of attendance.
ELFI student loans are available to students nationwide who are enrolled in a bachelor's degree program or higher. The lender offers multiple repayment terms and interest rates that are competitive in the industry. ELFI also provides support to borrowers through a Student Loan Advisor. You can borrow with a cosigner, but ELFI doesn't have a cosigner release option, nor does it offer any rate discounts.
pros
- One-on-one support available from a dedicated Student Loan Advisor
- Clearly discloses credit score and income required to qualify
- Wide range of repayment options
cons
- Loans only available for bachelor’s degree programs or higher
- Does not offer cosigner release
- No rate discounts for autopay
Loan amounts
$1,000 - Cost of attendance
Cosigner release
A cosigner may not be taken off a loan, but the borrower can apply for a new loan without their cosigner.
Eligibility
All 50 states as well as Washington DC and Puerto Rico.
Overview
Ascent offers several unique borrowing options that you don’t typically see with private lenders. In addition to traditional student loans for undergraduate, graduate, and medical programs, college juniors and seniors may qualify for its Outcomes-Based Loan — which doesn’t require established credit or a cosigner. Instead, Ascent reviews alternate factors such as your school, major, and GPA to determine your eligibility.
Ascent also offers a wide range of loan terms and repayment plans to choose from. You may even qualify for its Progressive Repayment plan, which allows you to start with small payments that gradually increase over time. Borrowers who use a cosigner can release them after as few as 12 payments, though international students don’t qualify for this option.
pros
- No application or origination fees
- Autopay discounts of 0.25 to 1.00 percentage points
- 1% cash back reward at graduation
- Extended grace periods of 9 to 36 months
cons
- Higher interest rates than some competitors
- International students can’t release their cosigner
Loan terms
5, 7, 10, 12, 15, or 20 years
Loan amounts
$2,001 minimum up to your school’s annual cost of attendance; lifetime limits of $200,000 for undergrads and $400,000 for graduates
Eligibility
Must be a U.S. citizen or DACA student enrolled at least half time at an eligible institution. International students with a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
$1,000 to $350,000 (depending on degree)
Overview
Citizens provides loans to undergraduates, graduate students, and parents. The lender also accepts international students, as long as they have a cosigner who's a U.S. citizen or permanent resident. The lender's multiyear approval program makes it easy to reapply for loan funds each year.
Borrowers can take advantage of an autopay discount of 0.25 percentage points, in addition to a loyalty discount if they have an existing account with Citizens. While student borrowers can defer their loan payments until six months after graduation, parents are not eligible to defer their payments.
pros
- Offers loyalty and autopay discounts
- Qualifying borrowers can take advantage of multiyear approval
- International students are eligible when they add a qualifying cosigner
cons
- Few repayment term options
- Longer cosigner release requirement than some lenders
- Can’t defer parent loans
Loan terms
5, 10, or 15 years for student loans; 5 or 10 years for parent loans
Loan amounts
$1,000 minimum, up to a maximum of $225,000 for undergraduate and graduate degrees; $300,000 for MBA and law; and $225,000 or $400,000 for health care student loans, depending on the degree type
Eligibility
Must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible institution. International students can apply with a cosigner who’s a U.S. citizen or permanent resident.
$1,000 to $99,999 annually $180,000 aggregate limit)
Overview
Citizens provides loans to undergraduates, graduate students, and parents. The lender also accepts international students, as long as they have a cosigner who's a U.S. citizen or permanent resident. The lender's multiyear approval program makes it easy to reapply for loan funds each year.
Borrowers can take advantage of an autopay discount of 0.25 percentage points, in addition to a loyalty discount if they have an existing account with Citizens. While student borrowers can defer their loan payments until six months after graduation, parents are not eligible to defer their payments.
pros
- Offers loyalty and autopay discounts
- Qualifying borrowers can take advantage of multiyear approval
- International students are eligible when they add a qualifying cosigner
cons
- Few repayment term options
- Longer cosigner release requirement than some lenders
- Can’t defer parent loans
Loan amounts
$1,000 to $99,999 per year (lifetime limit of $180,000)
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. You must also meet Custom Choice’s underwriting criteria for income and credit, or apply with a cosigner who does. Eligible noncitizens such as DACA residents can also qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.
$1,001 up to 100% of school certified cost of attendance
Overview
INvestEd is a student loan provider that offers loans exclusively to Indiana state residents. Students in the state and their parents who can meet INvestEd's income and credit requirements, or who have an eligible cosigner, are eligible. Loans of as little as $1,001 or as much as the school's cost of attendance minus other aid are available.
Potential borrowers can find detailed information on eligibility on INvestEd's website so they can determine whether or not to apply. But there's no option to prequalify with a soft credit check that doesn't affect your credit score. Cosigners can be released after just 12 on-time payments, which is considerably less time than many other lenders.
pros
- Minimum borrowing amounts lower than some other lenders
- Offers a quarter-point rate discount for using autopay
- Cosigner release after as few as 12 on-time payments
- Qualification requirements are easy to see online
cons
- Only Indiana residents can qualify for loans
- Cannot prequalify to see rates without a hard credit pull
- International students not eligible
Loan amounts
$1,001 minimum, up to the school certified cost of attendance
Eligibility
Loans are available to Indiana residents only. Borrowers must have a FICO score of 670 or higher, a 30% maximum debt-to-income ratio or minimum monthly income of $3,333, continuous employment over two years, and no major collections or defaults in recent years. Borrowers who do not meet income or credit requirements can apply with a cosigner.
$1,500 up to school’s certified cost of attendance less aid
Overview
Massachusetts Educational Financing Authority (MEFA) student loans fixed-rate options for undergraduate and graduate students across the country. MEFA's not-for-profit status helps it keep interest rates competitive, offering potentially lower borrowing costs than many other private lenders.
On the downside, flexibility is limited compared with some other lenders. Undergraduates can only choose between 10- or 15-year repayment terms, while graduate students must opt for a 15-year term. This might be restrictive if you're looking for more options. Cosigner release may also be a challenge. You'll need to make on-time payments for four consecutive years and meet specific credit and income criteria to release your cosigner.
pros
- No fees at any stage, including late payment fees
- Lower interest rates than many competitors
- Can cover your school’s full cost of attendance
cons
- Variable rate loans are not offered
- Fewer repayment term options than most lenders
- No autopay rate discount
- May be challenging to release a cosigner
- No option to prequalify with a soft credit check
Loan amounts
$1,500 minimum up to school-certified cost of attendance
Eligibility
Must be a U.S. citizen or permanent resident, enrolled at least half time at a degree-granting, nonprofit institution, and must maintain satisfactory academic progress. Must have no history of default on an education loan and no history of bankruptcy or foreclosure in the past 60 months. Applicants who can’t meet the minimum credit and income requirements may apply with a cosigner.
Loan Amounts
$1,000 up to 100% of school-certified cost of attendance
Overview
Sallie Mae offers a wide range of loans tailored to different needs, including those for undergraduates, graduates, MBA programs, law school, medical school, and health profession programs. It's also one of the few private lenders that provides loans for career training and trade schools.
If you apply with a cosigner, you might qualify for a lower interest rate. Sallie Mae has one of the shortest cosigner release periods—just 12 months—compared to other lenders. However, there's no option to prequalify and check your rates without affecting your credit. You'll need to complete a full application, which includes a hard credit inquiry that could temporarily lower your credit score.
pros
- Offers loans for certificate and trade school programs
- Cosigners can be released after just 12 months
- No prepayment, origination, or application fees
cons
- No prequalification options to check rates
- Must submit an application to view loan terms
- Does not offer parent loans
Loan terms
10 to 15 years for the Smart Option Student Loan; 15 years for law school, MBA, and graduate school loans; 20 years for medical school loans
Loan amounts
$1,000 up to school-certified cost of attendance. Student must be listed as the borrower, and a parent may cosign.
Cosigner release
After you graduate, make 12 one-time principal and interest payments, and meet certain credit requirements
Eligibility
Must be a U.S. citizen or permanent resident enrolled in an eligible program. Noncitizens residing and attending school in the U.S. may qualify by applying with a creditworthy cosigner, who must be a U.S. citizen or permanent resident, and providing an unexpired government-issued photo ID.
Loan Amounts
$1,000 up to 100% of the school-certified cost of attendance
Overview
College Ave offers a simple three-minute application, and has loans for nearly every borrower, from undergraduates to law school students. It's a great option for graduate students, who can take advantage of extended grace periods. The lender offers multiple repayment plans, as well as a discount of 0.25 percentage points for autopay.
With College Ave's multiyear approval program, 95% of undergraduate students who apply with a cosigner are approved for additional student loans. On the downside, borrowers must complete at least half of their repayment term before they can release a cosigner. Parent borrowers also can't fully defer loans - they must pay at least the interest during school.
pros
- Graduate loans have grace periods up to 36 months
- Offers multiyear approval for efficient borrowing
- Discount of 0.25 percentage points for autopay
cons
- Cosigner release only available after half of your repayment term
- Parents can’t defer interest payments while child is in school
- Doesn’t disclose minimum credit score or income
Loan terms
5, 8, 10, or 15 years for most borrowers (law, dental, medical, and other health profession students have up to 20 years)
Loan amounts
$1,000 minimum up to your school’s annual cost of attendance; lifetime limits depend on your degree and credit profile
Cosigner release
Available after more than half of the scheduled repayment period has elapsed and other requirements are met
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. International students with a Social Security number and a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
Loan Amounts
$1,000 up to cost of attendance
Overview
ELFI is a private student loan lender offering private student loans and refinancing for undergraduates, graduates, and parents. The lender, a division of Tennessee-based SouthEast Bank, offers loans starting at $1,000, with options to cover as much as the full cost of attendance.
ELFI student loans are available to students nationwide who are enrolled in a bachelor's degree program or higher. The lender offers multiple repayment terms and interest rates that are competitive in the industry. ELFI also provides support to borrowers through a Student Loan Advisor. You can borrow with a cosigner, but ELFI doesn't have a cosigner release option, nor does it offer any rate discounts.
pros
- One-on-one support available from a dedicated Student Loan Advisor
- Clearly discloses credit score and income required to qualify
- Wide range of repayment options
cons
- Loans only available for bachelor’s degree programs or higher
- Does not offer cosigner release
- No rate discounts for autopay
Loan amounts
$1,000 - Cost of attendance
Cosigner release
A cosigner may not be taken off a loan, but the borrower can apply for a new loan without their cosigner.
Eligibility
All 50 states as well as Washington DC and Puerto Rico.
Overview
Ascent offers several unique borrowing options that you don’t typically see with private lenders. In addition to traditional student loans for undergraduate, graduate, and medical programs, college juniors and seniors may qualify for its Outcomes-Based Loan — which doesn’t require established credit or a cosigner. Instead, Ascent reviews alternate factors such as your school, major, and GPA to determine your eligibility.
Ascent also offers a wide range of loan terms and repayment plans to choose from. You may even qualify for its Progressive Repayment plan, which allows you to start with small payments that gradually increase over time. Borrowers who use a cosigner can release them after as few as 12 payments, though international students don’t qualify for this option.
pros
- No application or origination fees
- Autopay discounts of 0.25 to 1.00 percentage points
- 1% cash back reward at graduation
- Extended grace periods of 9 to 36 months
cons
- Higher interest rates than some competitors
- International students can’t release their cosigner
Loan terms
5, 7, 10, 12, 15, or 20 years
Loan amounts
$2,001 minimum up to your school’s annual cost of attendance; lifetime limits of $200,000 for undergrads and $400,000 for graduates
Eligibility
Must be a U.S. citizen or DACA student enrolled at least half time at an eligible institution. International students with a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
Loan Amounts
$1,000 to $350,000 (depending on degree)
Overview
Citizens provides loans to undergraduates, graduate students, and parents. The lender also accepts international students, as long as they have a cosigner who's a U.S. citizen or permanent resident. The lender's multiyear approval program makes it easy to reapply for loan funds each year.
Borrowers can take advantage of an autopay discount of 0.25 percentage points, in addition to a loyalty discount if they have an existing account with Citizens. While student borrowers can defer their loan payments until six months after graduation, parents are not eligible to defer their payments.
pros
- Offers loyalty and autopay discounts
- Qualifying borrowers can take advantage of multiyear approval
- International students are eligible when they add a qualifying cosigner
cons
- Few repayment term options
- Longer cosigner release requirement than some lenders
- Can’t defer parent loans
Loan terms
5, 10, or 15 years for student loans; 5 or 10 years for parent loans
Loan amounts
$1,000 minimum, up to a maximum of $225,000 for undergraduate and graduate degrees; $300,000 for MBA and law; and $225,000 or $400,000 for health care student loans, depending on the degree type
Eligibility
Must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible institution. International students can apply with a cosigner who’s a U.S. citizen or permanent resident.
Loan Amounts
$1,000 to $99,999 annually $180,000 aggregate limit)
Overview
Citizens provides loans to undergraduates, graduate students, and parents. The lender also accepts international students, as long as they have a cosigner who's a U.S. citizen or permanent resident. The lender's multiyear approval program makes it easy to reapply for loan funds each year.
Borrowers can take advantage of an autopay discount of 0.25 percentage points, in addition to a loyalty discount if they have an existing account with Citizens. While student borrowers can defer their loan payments until six months after graduation, parents are not eligible to defer their payments.
pros
- Offers loyalty and autopay discounts
- Qualifying borrowers can take advantage of multiyear approval
- International students are eligible when they add a qualifying cosigner
cons
- Few repayment term options
- Longer cosigner release requirement than some lenders
- Can’t defer parent loans
Loan amounts
$1,000 to $99,999 per year (lifetime limit of $180,000)
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. You must also meet Custom Choice’s underwriting criteria for income and credit, or apply with a cosigner who does. Eligible noncitizens such as DACA residents can also qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.
Loan Amounts
$1,001 up to 100% of school certified cost of attendance
Overview
INvestEd is a student loan provider that offers loans exclusively to Indiana state residents. Students in the state and their parents who can meet INvestEd's income and credit requirements, or who have an eligible cosigner, are eligible. Loans of as little as $1,001 or as much as the school's cost of attendance minus other aid are available.
Potential borrowers can find detailed information on eligibility on INvestEd's website so they can determine whether or not to apply. But there's no option to prequalify with a soft credit check that doesn't affect your credit score. Cosigners can be released after just 12 on-time payments, which is considerably less time than many other lenders.
pros
- Minimum borrowing amounts lower than some other lenders
- Offers a quarter-point rate discount for using autopay
- Cosigner release after as few as 12 on-time payments
- Qualification requirements are easy to see online
cons
- Only Indiana residents can qualify for loans
- Cannot prequalify to see rates without a hard credit pull
- International students not eligible
Loan amounts
$1,001 minimum, up to the school certified cost of attendance
Eligibility
Loans are available to Indiana residents only. Borrowers must have a FICO score of 670 or higher, a 30% maximum debt-to-income ratio or minimum monthly income of $3,333, continuous employment over two years, and no major collections or defaults in recent years. Borrowers who do not meet income or credit requirements can apply with a cosigner.
Loan Amounts
$1,500 up to school’s certified cost of attendance less aid
Overview
Massachusetts Educational Financing Authority (MEFA) student loans fixed-rate options for undergraduate and graduate students across the country. MEFA's not-for-profit status helps it keep interest rates competitive, offering potentially lower borrowing costs than many other private lenders.
On the downside, flexibility is limited compared with some other lenders. Undergraduates can only choose between 10- or 15-year repayment terms, while graduate students must opt for a 15-year term. This might be restrictive if you're looking for more options. Cosigner release may also be a challenge. You'll need to make on-time payments for four consecutive years and meet specific credit and income criteria to release your cosigner.
pros
- No fees at any stage, including late payment fees
- Lower interest rates than many competitors
- Can cover your school’s full cost of attendance
cons
- Variable rate loans are not offered
- Fewer repayment term options than most lenders
- No autopay rate discount
- May be challenging to release a cosigner
- No option to prequalify with a soft credit check
Loan amounts
$1,500 minimum up to school-certified cost of attendance
Eligibility
Must be a U.S. citizen or permanent resident, enrolled at least half time at a degree-granting, nonprofit institution, and must maintain satisfactory academic progress. Must have no history of default on an education loan and no history of bankruptcy or foreclosure in the past 60 months. Applicants who can’t meet the minimum credit and income requirements may apply with a cosigner.
Fox Business does not make or arrange loans.
Choosing federal student loans is advisable for most students, especially those with little or no credit history. Federal loans typically don’t require a credit check and generally offer lower interest rates than private loans, making them more accessible and affordable for younger students who are just getting their start. Federal student loans also come with protections that private lenders generally don’t provide, such as student loan forgiveness, income-driven repayment plans, and more flexible forbearance or deferment. These can be invaluable if you later need help repaying your loan.
Depending on your total college costs, you may max out your federal loan borrowing limits. In that case, a private student loan can help you bridge any funding gaps and stay enrolled. Additionally, borrowers with excellent credit and a reliable income may qualify for lower rates on the private market. If you don’t have great credit, a well-qualified cosigner — usually a parent or a family member — could help you get approved and lock in better rates.
Check out: Federal vs. private student loans: Which should I choose?
Meet the contributor:
Jerry Brown
Jerry Brown is a personal finance expert, specializing in both student and personal loans. He has bylines at MSN, CBS News, Forbes Advisor, New York Post, and U.S. News & World Report.
