A guide to find money for school: scholarships, grants, and student loans

Get the money you need to pay for school

College is coming up—now let's figure out how to pay for it. You’ve got options! This guide breaks down the different ways you can cover your costs and important deadlines to keep in mind, so you don’t miss out on any funding opportunities.

Fall: During the application process

While you’re cranking out those essays and filling out college apps, remember to fill out the FAFSA^® too! You should submit your FAFSA^® (Free Application for Federal Student Aid) in the fall of your senior year of high school to receive financial aid for your first semester of college. The FAFSA^® is your key to getting all kinds of aid for school, like scholarships, grants, and federal student loans. Grants are given to students based on financial need and most are free money you don’t have to pay back. To qualify for federal student aid, you’ll need to fill out the FAFSA^® every year you’re in school.  

Some aid is awarded first-come first-served, so the earlier you file, the more money you could get. The FAFSA^® opens on October 1 and the deadline is June 30, so be sure to submit your app as close to October 1 as possible. Keep in mind that federal student loans and some grants do require you to pay them back, so make sure you fully understand the details.

Spring: After getting accepted

You’re in! Now what? You’ve got until May 1 to decide what school you’ll be attending. If you filed the FAFSA^®, you should receive a financial aid offer from each school you listed in your application. Be sure to carefully review your offers so you can choose the school that works best for you.

Pro tip: You don’t have to accept all the aid that’s offered. Not accepting federal loans may help you avoid debt and reduce future monthly payments.

Once you’ve made that decision, you’ll have a better idea of how much you’ll need to pay, and you can create a budget. Start with money you don’t have to pay back, like savings, grants, and scholarships. Talk to your family to see if you have any savings for college and go from there. Scholarships are available year-round, so you should keep applying when you can. Scholly^® Scholarships by Sallie^SM lets you browse and apply for scholarships based on your background, major, the state you live in, and more.

Summer: Before the school year starts

Your tuition bill is typically due before the fall semester starts. If you’ve added up your scholarships, savings, and federal aid, and you still need money to pay for school, a private student loan may help you cover the rest of your college costs.

Remember, it's important to consider federal student loans before you take out a private student loan because there are differences in interest rates, repayment options, and other features.

Understanding private student loans 

Before you apply for a private student loan, it’s good to understand how it works and what you may need to apply. Private student loans are different than federal loans. They’re credit-based, meaning lenders will check your creditworthiness before approving a loan.

Your interest rate depends on factors like your credit history and the loan terms you choose. Most private student loans are taken out by the student (usually with a creditworthy cosigner), but some private student loans can also be taken out by a parent or other creditworthy individual, such as a legal guardian, significant other, or relative.

Some loans offer flexible repayment options, including payments during school, which can lower your interest rate and overall loan cost. If you ever have difficulties making payments, you may hear the terms delinquency and default. Delinquency happens when you're late on a payment, possibly leading to late fees. Default occurs when you fail to repay your loan, making the full balance due. Keep in mind that even if you don’t graduate, you must repay the loan, and defaulting can harm your credit.

How to apply for a private student loan

It’s important to know how to apply for a private student loan and what to expect before you borrow. Here’s a step-by-step guide to walk you through the application process.

1. Gather your information

Before you apply, make sure you have:

• Personal info—like your address and Social Security number, if you have one
• School details—school, enrollment status, and degree 
• Finances—from bank accounts to any monthly mortgage or rent payments 
• Cosigner info—if you have one, they’ll need to provide the same info 

2. Decide what type of loan you want 

Private student loans are offered by banks, credit unions, and other financial companies. There are a lot of loans out there, so you’ll want to know your options. You may be able to get a list of lenders by contacting your college’s financial aid office, checking local banks and credit unions, or asking friends and family about who they’ve used for private student loans.

Once you have some options, go online and compare what each lender has to offer. A spreadsheet can help you keep track of different loan features. Here are some things you won’t want to miss: 

• Repayment options—do you want to start paying while you’re still in school or wait until you leave school?
• Interest rates and fees—which loan works best for your finances?
• Loan type—are you applying for an undergraduate or graduate student loan?
• Benefits—are there benefits that can help lower the cost of your loan, like auto debit? With Sallie Mae^®, you may qualify for a 0.25 percentage point interest rate discount by enrolling in auto debit.^{footnote 1}

3. Consider a cosigner 

If you don’t have a lot of credit history, you may benefit from having a cosigner. Only one person can cosign for a private student loan, and they are just as responsible as you to pay back the full amount of the loan. A cosigner can be a family member, guardian, friend, or spouse. You should choose someone you know and trust, and who is willing to fill out the application on their own.

A cosigner with good credit can make it easier for the loan to be approved and you may get a better rate. Last year, students were 3.5X more likely to be approved for a Sallie Mae® student loan with a cosigner.^{footnote 2}

4. Submit your application

Apply online or with your lender. Once you submit your application, the lender will review your and your cosigner’s (if you have one) credit. Every lender has specific criteria that they look for—this can include a particular credit score range, outstanding debts, income, and more.

To get approved for credit, the lender will evaluate your credit history to make sure you’ll be able to pay back your loan after you borrow the money.  It can take as little as 15 minutes to find out whether you’ve met their credit requirements or a few business days if more info is needed. If you’re approved, the lender will notify you and move forward with the next steps. 

5. Choose your loan terms 

After you’re credit-approved, you may need to make some choices—like whether you want to make payments during school or defer them (wait until after school), and whether you’d prefer a fixed or variable interest rate. You can usually find your choices on the lender’s website.

The lender may ask you and your cosigner to accept the loan terms for your loan by phone or online. Make sure that you understand what you’re accepting—this is a legal document. If you have questions, ask the lender.

6. School certifies the loan

Your school confirms that you’re enrolled and that the loan amount doesn’t exceed your cost of attendance (COA). This usually happens automatically between the lender and your school. After your loan is certified, the lender will give you a Final Disclosure. This lists your loan’s specifics: interest rate, number of payments, fees, and other important info. Keep this handy—you'll want easy access to this info later.

7. Funds are sent to your school 

Once everything is certified and the cancellation period ends, your student loan is ready to be disbursed (sent to your school). The funds may be divided into multiple disbursements, usually one per semester. If you chose a repayment option with in-school payments, your monthly payments begin as soon as your funds are disbursed.

You may get a student loan refund if there are funds left over after paying your college costs. Keep in mind, this money is still part of your loan, so you’ll need to pay it back later—with interest. You can choose to return the funds to lower your total student loan cost or use the money now for any other school expenses you may have. 

Ready to pay for college? 

Remember, free money first—always! Keep filing the FAFSA^® each year you’re in school to get financial aid and continue applying for scholarships, too. Once all of that is maxed out (plus savings!), then a private student loan may help you cover the rest. If you have questions about applying for a student loan or any of the terms in your loan, ask your college’s financial aid office or call your loan provider for help.