When’s the Right Time to Apply for a Student Loan?

When’s the Right Time to Apply for a Student Loa

BIG Ideas:

  • Start the process of applying for student loans by researching loan types, interest rates, and fees.
  • Staying on top of your loan balances during and after college can help you take charge of your financial life and explore options to lower your payments and overall debt.

Your college journey is filled with many exciting milestones – and things to do. There’s the college search and tours, the essay writing, and the submission of applications. There’s also another important step you may have to take to kick-start your college planning: applying for a student loan to help make it possible.

But when is the right time?

Well, here’s a handy timeline to help you get across the student loan finish line:

6-12 Months Before School Starts: Get Schooled on Student Loans

An informed borrower is a wise borrower. That’s why you should understand your borrowing options and your needs. Specifically, you should know:

  • The types of student loans – federal vs. private loans and the differences between them
  • The interest rates lenders are charging, whether they offer fixed or variable rates, and how interest is calculated
  • The fees lenders charge – such as application and pre-payment fees
  • Whether you can apply on your own or if you need a co-signer
  • How much time you have to pay back the loan (the repayment period)

Gather up your documents. To apply for a loan, you must complete and provide paperwork, including tax returns and personal information like your Social Security number. If you’re applying with a co-signer, they’ll need to provide that information as well.

Got it? Let’s move on to the next stop on our timeline.

6-9 Months Before School Starts: Knock Out the FAFSA

Filling out the FAFSA, or Free Application for Federal Student Aid, is how you apply for federal grants, work study, and loans for each year you are in school.

States and colleges also use information from the FAFSA to determine aid. Check out these tips to help you complete your FAFSA.

1-3 Months Before School Starts: After the FAFSA is Completed

After you complete the FAFSA, you’ll receive the Student Aid Report (SAR), which highlights your eligibility for aid, including federal student loans. Review this information carefully and report any discrepancies or errors that may appear.

Using the information in the SAR, your school will send you a financial aid offer, which will show the federal loans, grants, and work-study options that are available to you. At this point, you’ll need to accept the aid you want and decline the aid you don’t need.

1-2 Months Before School Starts: Go Time – To Apply for Your Student Loan

Once you know the cost of college and the amount of aid you’ll receive, you can determine how much more you’ll need to borrow. That’s where private loans (from non-government lenders like Brazos) bridge the gap.

Not all private student loan lenders are alike, so research your options for the best rates and terms. You can then submit your applications and sign loan agreements.

2-4 Weeks Before School Starts: Finalize Your Loan Details

If you have federal loans, you’ll need to complete loan entrance counseling, which explains the loan and your rights and responsibilities.

Once you meet that requirement, you can sign the Master Promissory Note (MPR), the legal agreement to pay your federal loans and any accrued interest and fees that come with them.

2 Weeks Before School Starts: Confirm Your Loans

Contact your college and lender to ensure that the government and/or the private lender has sent the money to the school. You’ll also want to set up a repayment plan with the lender to determine when you must start making payments on your loan.

During the School Year – and After College

Again, an informed borrower is a wise borrower. That’s why you should regularly log in to your loan accounts and monitor your student loan balances. When you graduate, you may want to look into ways to help lower your debt like refinancing your loans and putting more money on the principal.

If you have a federal loan, work for a qualified employer, and meet other requirements, you could apply for Public Service Loan Forgiveness. You can also apply for income-driven repayment to help make your payments more manageable.

Brazos is Here to Help You Along Your Journey

By following this timeline, you’ll be better prepared to get the student loan you need to start this incredible and thrilling life journey known as college. And of course, if you need financial help along the way, Brazos is here for you.

For more than 40 years, we’ve been helping make education more affordable for students. As a Texas non-profit, we offer great rates and no fees on private student loans to help fill the gap where federal loans leave off. Contact us to learn more.