If you are a student looking to make your way into professional studies but your parents can’t afford it or don’t have the expenses yourself, a student loan is the best way to go around the situation. A student loan allows you to proceed with your desired degree without any financial burdens pulling you back.
There are two types of student loans. These include:-
- Federal student loans
- Private student loans
The eligibility criteria of both these types are different, and thus, you need to fall into one of them to get a particular type of loan. So, if you would like to know which category you fall under, then READ ON.
#1 Federal Student Loans Eligibility Criteria
The first step is for the student to file the Free Application for Federal Student Aid (FAFSA). Then the borrower needs to be enrolled for at least a half-time basis. The borrower must have US citizenship and be a permanent resident or an eligible non-citizen. Following are further requirements to get a federal study loan:
- For Federal Parent PLUS loans, the student would have to satisfy the citizenship criteria
- The borrower’s credit is not a factor for the eligibility of Federal Stafford loans
- A Federal PLUS loan borrower MUST have a good credit history
- federal education loans eligibility does not depend on credit scores, debt-to-income ratios, minimum income thresholds, or employment history, but the borrower MUST not be a defaulter on a federal education loan
- A federal student loan borrower does have an age gap, so anyone can apply for it as long as it satisfies the eligibility criteria
- The student’s financial requirements influence the eligibility for the subsidized loans
- The student must be enrolled in an eligible program as a regular student to apply for the federal loan
- The student needs to satisfy the general eligibility requirements for the federal student aid, like the Selective Service registration for male students, having a high school diploma or GED (or a home-school equivalent that satisfies the state requirements), and upholding reasonable academic progress (minimum 2.0 GPA/4.0 scale)
- The Federal student loans aren’t suitable for borrowers after they graduate; for instance, the student’s cant avail of this loan during a medical school residency or the after law school
#2 Private Student Loans Eligibility Criteria
The eligibility criteria for private student loans include the following conditions:-
- The borrower needs to be creditworthy or have a creditworthy cosigner. There are nearly 90% private student loans for undergraduate students and more than 75% private student loans for graduate students made with a creditworthy cosigner.
- Creditworthiness is measured through the credit scores, annual income, debt-to-income ratios, and employment history.
- A private student’s minimum (legal age) for the loan scheme might depend on the residence state. The age limit of majority students in Indiana is 21, Mississippi, and New York. While in Alabama and Nebraska, it is 19 Alabama, and in other states, it is 18.
- The borrower and cosigner need to satisfy the citizenship requirements. All lenders need the cosigner to be creditworthy US citizens or permanent residents of any state. A lot of the lenders also require the permanent residence and US citizenship of the student. Some lenders let an international student be nominated with a cosigner who is a creditworthy US citizen or a permanent resident.
- Some lenders might also require the enrollment of the borrower on at least a half-time basis. While the others have special loan programs for continuing education students
- Eligibility can also depend on the academic major or the participating school, degree, or the student
- Private loans don’t require the students to file the FAFSA