If you're struggling to finance a college or graduate school education, student loans may be a possible solution. Unlike scholarships, they are not merit based, which means that you can qualify with less than stellar grades and stand-out extracurricular activities. For many student loans, you can defer payments until several months after you finish your education, so that you don't have to worry about making payments at the same time you're studying for finals. You can also use the money you borrow for any legitimate school related purpose, not just tuition. That means that if you have an especially demanding program, you can borrow enough to cover rent, household expenses, even transportation, so that you don't have to hold down a job while you're enrolled. Depending on the loan program, you may not even need to pass a credit check.
Federal student loans include subsidized and unsubsidized Stafford loans, PLUS loans for parents and graduate students and Perkins loans. Subsidized Stafford loans are for undergraduate or graduate students who have demonstrated financial need based on the results of their completed Free Application for Financial Student Aid (FAFSA). The federal government pays the interest on subsidized Stafford loans until after you finish your program. You also use the FAFSA to apply for unsubsidized Stafford loans, but you must either pay the interest on the loan or add it to the principal balance of the loan until after you finish school. You do not need to pass a credit check to obtain a Stafford loan.
PLUS loans are for parents of students that can be claimed as dependents on the federal income tax return or for independent graduate students. You or your parents must complete a Direct PLUS loan application and a Master Promissory Note to apply for a PLUS loan. You also must pass a credit check. Repayment starts within 60 day after you receive the first disbursement from the loan, but you or your parents may defer payments as long as you are enrolled at least half-time and for six months afterwards.
Perkins loans are distributed by individual institutions but funded by the federal government. They are reserved for undergraduate and graduate students who show exceptional financial need through their FAFSA results. You do not need to pass a credit check to receive a Perkins loan, and you can defer repayment while you are enrolled at least half time and for six months afterward.
Your school may offer its own financial aid, including loans, many of which are funded by donors. These loans often require you to demonstrate financial need, but usually do not require a credit check. If you've tapped out all the federal and school based aid available and you still need funds, you may turn to private lenders. Private lenders do not require you to complete the FAFSA or demonstrate financial need. However, passing a credit check is a must. Many students will need a co-signer with strong credit history to qualify for a student loan with a private lender.