When Can You Apply for a Student Loan?

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By Mark Kantrowitz

May 21, 2020

When do you apply for a student loan for the school year? Is it after July 1 for the new rates? Or can you apply for a student loan at any time?

When to Apply for a Federal Student Loan

Before you can apply for a federal loan, first file the Free Application for Federal Student Aid (FAFSA). You cannot receive a federal education loan without filing the FAFSA.

The interest rates for a federal education loans are based on the date the loan is disbursed, not the date of the loan application.

After the FAFSA is processed, the college financial aid office will send you a financial aid award letter or notification, which may mention your eligibility for subsidized and unsubsidized federal student loans. The financial aid award letter will tell you how to accept the loans.

Before the loan can be disbursed, the borrower must complete entrance counseling and sign a Master Promissory Note (MPN).

Federal loans will usually be disbursed after the first day of the academic term. Depending on the college, there may be an automatic 30-day delay for first-year, first-time borrowers of federal student loans, but not federal parent loans. The loans may be disbursed in two installments.

When the loans are disbursed, the loan proceeds are first applied to institutional charges for tuition and fees, plus room and board if the student lives in college-controlled housing. Any remaining credit balance will be “refunded” to the student within 14 days.

If you filed a FAFSA but decided against borrowing federal loans and later changed your mind, you can apply for a federal education loan up until the deadline, which is the last day of classes or June 30, whichever is earlier. You can borrow for the first term during a later term within the same academic year, provided that you were eligible for loans during the first term (e.g., at least half-time enrollment, making satisfactory academic progress, etc.).

When to Apply for a Private Student Loan

You can apply for a private student loan at any time. A FAFSA is not required. People apply for private student loans throughout the year, but the peak period for new loans is during the summer months and refinance in late fall. Rejections are immediate, but conditional approval may require a secondary review that can take days to weeks.

Federal student loans are often preferred over private loans because of the benefits. Federal student loans have the potential for forgiveness, potential for subsidized loans, options for income-based repayment, and generous deferment options. If you refinance a federal loan into a private loan, all of these benefits are lost.

Exhaust all other resources before borrowing student loans, including scholarships and grants. If you need student loans, be sure to borrow responsibly.

A good place to start:

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