Getting a student loan starts with filling out the Free Application for Federal Student Aid (FAFSA) at StudentAid.gov. Federal loans offer lower interest rates and more flexible repayment options than private loans, so they should be your first step regardless of your financial situation. The entire process, from application to receiving funds, takes a few weeks and involves some paperwork, but none of it is complicated once you know what to expect.
Start With the FAFSA
The FAFSA is a single form that determines your eligibility for federal student loans, grants, and work-study programs. You fill it out online at StudentAid.gov, and your results get sent to the colleges you list on the form. Each school then sends you a financial aid offer based on your FAFSA data.
Before you open the form, every person required to provide financial information needs their own StudentAid.gov account. If you’re a dependent student, that means both you and at least one parent. These accounts are free and take a few minutes to create, but do it before you sit down to fill out the FAFSA so you’re not stuck waiting mid-application.
The 2026-27 FAFSA covers the award year running from July 1, 2026, through June 30, 2027. File as early as possible. Some aid is first-come, first-served, and many states and colleges set their own earlier deadlines for grants and scholarships.
Documents You’ll Need
Gather these before you start:
- Tax returns for you and, if you’re a dependent, your parents
- Records of child support received
- Bank statements showing current balances of cash, savings, and checking accounts
- Investment and business records showing the net worth of investments, businesses, and farms
- Your parent’s Social Security number if applicable
One critical requirement: every contributor on your FAFSA must consent to have their federal tax information transferred directly into the form. If a required contributor refuses to provide that consent, you become ineligible for federal student aid, even if they try to enter tax information manually. This is a hard rule, not a technicality.
You must list at least one school on your FAFSA. You can add up to 20, and there’s no disadvantage to listing more. Each school receives the same information and creates its own financial aid offer for you.
Types of Federal Student Loans
Your school’s financial aid office determines which loans you’re eligible for and how much you can borrow each year. There are three main types.
Direct Subsidized Loans are available to undergraduate students who demonstrate financial need. The government pays the interest while you’re enrolled at least half-time and during a six-month grace period after you leave school. For loans first disbursed between July 1, 2025, and July 1, 2026, the fixed interest rate is 6.39%.
Direct Unsubsidized Loans are available to both undergraduates and graduate students regardless of financial need. You’re responsible for all the interest from the day the loan is disbursed. The rate is 6.39% for undergraduates and 7.94% for graduate and professional students during the same period.
Direct PLUS Loans are for graduate students and parents of dependent undergraduates. They carry a higher rate of 8.94% and require that the borrower not have an adverse credit history. PLUS loans can cover the full cost of attendance minus any other financial aid received.
How much you can borrow in subsidized and unsubsidized loans depends on your year in school, whether you’re a dependent or independent student, and your enrollment status. Your school will tell you the exact amount in your financial aid offer. There are both annual limits and lifetime aggregate limits that cap total borrowing across all years of study.
Complete Entrance Counseling and Sign Your Promissory Note
After you accept the loans in your financial aid offer, two steps remain before the money is disbursed. Both happen online at StudentAid.gov.
First, you complete entrance counseling. This is required for first-time borrowers and takes about 30 minutes. It walks you through how interest works, your repayment options, and what happens if you fall behind on payments. You need to finish it in one sitting since you can’t save and return later, and your session will time out after 15 minutes of inactivity. Have your school name and financial aid offer handy when you start.
Second, you sign a Master Promissory Note (MPN). This is a legal agreement to repay your loans plus interest. A single MPN covers all Direct Loans you receive over up to 10 years at the same school, so you typically sign it once as an undergraduate.
Once your school confirms both are complete, your loan funds are applied to your tuition and fees. Any remaining balance is paid to you directly for other education expenses like books and housing.
When Federal Loans Aren’t Enough
If your federal loans don’t cover the full cost of attendance, private student loans from banks, credit unions, and online lenders can fill the gap. These work differently from federal loans in important ways.
Private lenders check your credit. Most require a credit score of at least 640, though some lenders set the bar at 650 or 680. If you’re a college student with little or no credit history, you’ll likely need a cosigner, typically a parent or other adult with established credit. The cosigner is equally responsible for repaying the loan, and a missed payment affects their credit score too.
Interest rates on private loans vary based on your creditworthiness and the lender. They can be fixed or variable, and they’re generally higher than federal rates. To qualify for the lowest advertised rates, you typically need excellent credit and strong overall finances. Shop around and compare offers from multiple lenders before committing.
Private loans also lack the borrower protections built into federal loans. There are no income-driven repayment plans, no loan forgiveness programs, and no automatic forbearance during economic hardship. Exhaust your federal options first.
How Long the Process Takes
The FAFSA itself takes most people under an hour to complete. After you submit it, your information is processed and sent to your listed schools. Schools then build your financial aid offer, which typically arrives within a few weeks, though timing varies by institution.
Once you accept your loans and complete entrance counseling and your MPN, funds are disbursed according to your school’s schedule, usually at the start of each semester. Most schools apply loan money to your account shortly before or after classes begin.
For private loans, the timeline depends on the lender. Expect to spend time comparing rates, submitting an application with income and credit documentation, and waiting for approval. Many lenders can fund a loan within two to four weeks of a completed application, but starting early gives you a cushion if anything needs to be resubmitted.
Borrowing Only What You Need
Your financial aid offer may include more loan money than you actually need. You’re not required to accept the full amount. Every dollar you borrow accrues interest, and even at 6.39%, that adds up over four years of college plus the repayment period that follows. If you can cover part of your costs through savings, work, or scholarships, borrowing less now saves you real money later. You can always request additional funds through your financial aid office if your situation changes during the school year.