Questions about Finding and Getting Student Loans

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By Mark Kantrowitz

June 16, 2020

During our webinar about Student Loans 101 (Borrowing), participants asked dozens of questions. Here are the answers to questions on borrowing student loans, finding student loans, and getting student loans:

Is there a student loan broker, like a mortgage broker, who can help you shop for the lowest rate and best loan for you?

Yes. There are several student loan brokers, called student loan marketplaces, that help you shop for student loans. Examples include Credible, Simple Tuition, eStudentLoan and Student Loan Hero. will soon be launching a 5-cap rating system for student loans, similar to the 5-cap rating system for college savings plans. This will compare the student loan programs using an objective set of criteria based on several dozen data points.

If a financial aid award letter has a student loan offer, but we do not want it, can we refuse it?

Yes. There is no obligation to borrow the student loans listed on the financial aid award letter. You can borrow less or not at all, or you can choose other lenders. If you turn down the loans listed on the financial aid award letter, you will not get more grants and scholarships to replace them.

Can I ask colleges to give me a greater subsidized loan instead of unsubsidized? Is that usually successful?

You can ask, but it usually will not happen. 

Eligibility for subsidized loans is based on financial need. After a student is awarded a subsidized Federal Direct Stafford Loan, they can borrow the rest, up to the overall Federal Direct Stafford Loan limits, as unsubsidized loans.

Subsidized Federal Direct Stafford loans have lower annual and aggregate loan limits than the overall Federal Direct Stafford loan limits.

For example, the annual limit for subsidized Federal Direct Stafford loans for a college freshman is $3,500 or financial need, whichever is less, while the overall limit is $5,500. Colleges cannot exceed the $3,500 limit. So, every freshman is eligible for at least $2,000 in unsubsidized loans, the difference between the annual limits for subsidized loans and the overall limit. 

Sometimes, if a student is awarded a Federal Work-Study job, which is also based on financial need, they can ask the college to replace the Federal Work-Study job with additional subsidized Federal Direct Stafford loans, up to the annual and aggregate limits. 

If a student borrows student loans for four years, is it true that she will graduate with 16 student loans? Will the government only assign one provider to each student?

Previously, a student might receive a subsidized Federal Stafford loan, an unsubsidized Federal Stafford loan, a Federal Perkins loan and a Federal Parent PLUS loan each year. Over a four-year college career, that could result in a total of 16 loans. The Federal Perkins loan program ended on September 30, 2017, however, with the last disbursements during the 2017-2018 academic year. So, it is more common for a student to graduate from a 4-year college with 8-12 loans.

Students can also borrow private student loans and parents can borrow private parent loans, which can increase the number of loans at graduation.

It can be easy for a student to overlook one or more of their loans, so it is important to get organized and keep track of all of your loans.

The U.S. Department of Education assigns a borrower’s student loans to a loan servicer randomly. The borrower does not get to choose the servicer for their student loans. 

The U.S. Department of Education tries to assign all of a student’s Federal Direct Loans to a single loan servicer. This is called serialization. However, sometimes glitches occur. For example, a student might have one servicer for their undergraduate loans and another for their graduate loans.

Parent loans may also be assigned to a different servicer than the student loans, since the parent loans have a different borrower than the student loans.

There are, however, a few ways you can change your federal student loan servicer:

  • If your loans are not all with the same servicer, call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243) to let them know about the problem. They can arrange to have all of your loans transferred to the same servicer. 
  • When you consolidate your federal student loans into a Federal Direct Consolidation Loan, you can choose the new servicer.
  • If you are seeking public service loan forgiveness, your loans will be transferred to FedLoan Servicing when you file an Employment Certification Form (ECF) or apply for public service loan forgiveness. 
  • If you apply for a Total and Permanent Disability Discharge, your loans will be transferred to Nelnet
  • You can refinance your federal student loans into a private student loan.

The U.S. Department of Education is developing a Next Generation Financial Services Environment (NextGen), which will provide a unified loan servicing platform. With NextGen, borrowers will use a single web site and a single telephone number to access their federal loans and contact their loan servicer. You might not even know who your loan servicer is. 

Will it hurt my credit to apply to several different private lenders to find the one with the best interest rates and loan terms?

The credit bureaus now recognize shopping-around behavior for student loans. So, if you apply for several private student loans within a short period of time, it will be treated as a single inquiry instead of multiple inquiries.

In addition, many private lenders are now doing a soft credit check when a borrower applies for a private student loan. This does not affect the borrower’s credit. If you accept the private student loan, the lender will do a hard credit check before disbursing the loan.

Do you apply for one loan for all 4 years of college, or do you have to apply each year?

For federal student loans, borrowers must apply each year by filing the Free Application for Federal Student Aid (FAFSA). The FAFSA covers only one year at a time.Most private student loans require borrowers to apply annually. However, a few lenders offer a multi-year option. These lenders include Citizens Bank and Discover Student Loans.

At, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.

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