Keep these things in mind while you're applying for a student loan

Top mistakes to avoid when applying for student loans

Applying for student loans can feel overwhelming, but avoiding common mistakes can make a big difference. A little planning now can save you stress (and money) later. Here are the top mistakes to keep in mind so you can borrow smart and stay on track.

10 things not to do when taking out student loans

Don’t let student loan mistakes cost you big—know what to avoid before you borrow.

1. Skipping the FAFSA^®

No FAFSA^®, no federal aid. Even if you think you won’t qualify, fill it out— applying is the only way to know for sure. And remember, financial aid isn’t a one-time thing. You need to submit the FAFSA^® every year to stay eligible for grants, scholarships, and federal loans. Missing it could mean leaving free money on the table.

Got questions about the FAFSA^®? Our FAFSA^® Guide walks you through the application so you can maximize your financial aid for college.

2. Borrowing more than you need

Remember that loans aren’t free money—you’ll have to pay them back, with interest. Borrow only what covers your actual expenses to keep your future payments manageable. A smaller loan now could mean less stress later, so budget carefully and only use what you really need.

3. Ignoring interest rates

Not all loans are created equal. Some have fixed rates that stay the same, while others have variable rates that can change over time. Knowing the difference can help you plan for payments and avoid surprises. Compare your options before committing so you know exactly what will work best for your situation.

4. Forgetting about repayment plans

Before taking out a loan, check out the repayment plans available. Knowing your options helps you pick the one that works best for you. Whether you want a fixed monthly payment or a flexible Income-Driven plan, understanding your choices now will help you make the right decision for when it’s time to start paying.

Keep in mind, repayment plans vary by loan type. Private student loans do not offer income-based repayment. Only federal student loans are eligible.

5. Assuming all loans are the same

It’s important to understand the difference between federal and private loans before taking one out. Federal loans come from the government, while private loans are offered by banks or other lenders. Private student loans also usually require a cosigner. Each type of loan has its own terms, conditions, and repayment options, and knowing what you're signing up for helps you down the road.

6. Not reading the fine print

Reading the fine print before taking out a student loan is key to understanding what you’re agreeing to. It helps you catch important details like loan terms, interest rates, and repayment schedules.

You can also see over the life of your loan how much you will owe back with interest. These factors can affect how much you pay over time, so knowing what to expect can help you make a more informed decision. Take those few extra minutes to review your loan disclosures before you submit your application—it’s worth it.

7. Missing out on scholarships and grants

Scholarships and grants are a great way to cover college costs without racking up debt, so apply to as many as you can. Every scholarship or grant you get reduces what you need to borrow, making things easier when it comes time to pay.

Need a place to start? Scholly^® Scholarships by Sallie^SM makes it easy to find and sort through thousands of college scholarships.

8. Forgetting to reapply for aid

We said this above, but it’s worth repeating. You need to submit the FAFSA^® every year.

9. Not asking for help

Confused? You’re not alone. Navigating financial aid and student loans can be tricky, but that’s what your school’s financial aid office is for. They’re there to help answer questions, explain your options, and guide you through the process.

Whether it’s about scholarships, loans, or repayment, don’t hesitate to reach out for support. They want to make sure you get the assistance you need to make college more affordable.

10. Waiting until the last minute

Deadlines sneak up fast, and it’s easy to forget about them until it's too late. Stay ahead by applying early so you’re not scrambling for funds when tuition is due. The sooner you get your applications in (like for FAFSA^® or private student loans), the better your chances of getting the financial aid you need.

Make smart loan moves

By steering clear of these mistakes, you’ll make the loan process easier and set yourself up for success after graduation. Take your time, ask questions, and always go for the free money first—you’ve got this!