Transitioning from high school to higher education is both an exciting and nerve-racking time. While you may be anxiously planning out this next step, you will quickly realize the significant costs required to not only pay for school tuition and fees, but also food, housing, and fun. Don’t let the dollar signs deter you from your dream; you have options.
Funding your college education can be confusing while trying to navigate your way between grants, scholarships, and loans. These terms might seem interchangeable when trying to understand the financial options available to you, but the simple answer is grants and scholarships are gift-money that does not been to be paid back, whereas student loans are borrowed money that is required to be paid back.
Student Loans vs Scholarships
When it comes down to it, you are the only one who can decide what financial path is best for you.
Scholarships are free money that generally does not need to be paid back. They can require more effort and you are not guaranteed to be the winner but can be extremely beneficial to offset the cost of college should you be successful in receiving one or more.
Student loans are borrowed money for college that must be repaid typically with interest. You can borrow from either the federal government or from a private lender. Paying your loans on time will help you build credit. While the amount of money to cover the costs of college can be daunting, always keep in mind that this is an investment in your future that will ultimately help you to achieve your goals.
What is a Scholarship?
A scholarship award is money given to selected students who meet the requirements set out by the scholarship program. Scholarships can come from either public or private organizations, local or state governments, or schools themselves. These can be awarded based on academic or athletic ability, field of study, area of service, demonstrated leadership skills, or specific talents. Grants are typically awarded to students with financial need. Either way, a grant or scholarship, is money that generally does not have to be paid back and is considered gift-aid.
Scholarships can be full-ride scholarships that pay most, if not all tuition, room and board, food, books, and other living expenses, while other scholarships award a set money amount ranging anywhere from a couple hundred dollars to much as $50,000 or more. But when it comes to money you receive from gift-aid, a dollar awarded is better than a dollar borrowed.
How to Get a Scholarship
When applying for scholarships, carefully read the directions, ensure you meet all the eligibility criteria, and complete each part of the application. Some scholarships through your school may require you to complete the Free Application for Federal Student Aid (FAFSA®), but many merit-scholarships are not contingent on your family finances. Merit scholarships are awarded for work you have completed during your high school career such as GPA, ACT/SAT scores, artistic or music ability, talents or skills, or community involvement.
You should meet all the requirements and turn in your application by the due date. Remember, the odds are you will not win every scholarship you apply for, but that just means you need to apply to as many scholarships as possible to increase your chances of winning. You could also look for no-essay sweepstakes scholarship opportunities, like our scholarship through ScholarshipPoints.
There are no caps on how many scholarships you may receive. It is possible to win more scholarships than the total cost of attendance. However, you may run into issues with your financial aid at your school. Your school cannot allow you receive financial aid in excess of your school’s set cost of attendance. The financial aid office will adjust your other financial aid to accommodate scholarship.
If you do end up receiving more scholarship money than you need, contact the scholarship provider to discuss the award policy. You may want to ask if you can defer your award for a year or have the funds placed in a free college savings plans for future education costs.
What is a Student Loan?
Student loans are money you borrowed from either the federal government or a private lender to help cover the cost of college. This money is a loan and as such, you are required to pay it back with interest and sometimes fees. Student loans payments are generally deferred while you are in school to allow you to focus on your education, with your first payment typically due about six months after graduation or after your attendance drops to less than half-time enrollment.
Grants and scholarships may not always be able to fully cover the cost of attendance. Loans may be an option to help you cover all your costs as a student, but make sure you are aware how you are using the money. Only borrow what you need to cover the costs of your education. Loans should be used to cover gaps in financial aid that are not covered by gift-aid. Borrow smart and only borrow what you need.
Federal vs. Private Student Loans
Federal loans may be offered in your student aid package upon completion of the FAFSA. With federal student loans, your lender is the U.S. Department of Education. The terms and conditions for these loans are non-negotiable and are set by law. Federal student loans are known to have many borrower benefits, such as fixed interest rates and income-driven repayment plans.
Private student loans can be borrowed through private lenders such as banks and credit unions. Loan terms and limits are set by the lender, which means you may have more options than the terms and limits set by federal student loans. For example, you might be able to choose between a variable or fixed interest rate, which may be higher or lower than the fixed rate set by the federal government.
While there may be more attractive rates and terms when it comes to private loans, there are fewer repayment options if your circumstances change. Federal loans offer several different kinds of repayment options to work with borrowers, especially when life doesn’t go as planned.
Types of Federal Student Loans
There are a few different types of federal student loans, such as, Direct Stafford Subsidized Loans, Direct Stafford Unsubsidized Loan, and Direct PLUS Loans. Federal loans are often the best place to start when it comes to student loans. These loans include certain benefits that you may not receive with private student loans, such as generous deferment periods and forbearance, repayment plans based on your income, and public service loan forgiveness for those who qualify.
The Direct Stafford Subsidized Loan is considered a need-based loan available only to undergraduate students. These loans have a fixed interest rate as determined by Congress. The interest rate is the cost of borrowing money. The federal government will subsidize this type of loan by paying the interest on the loan while you are enrolled in school at least half-time, during the loan’s grace period, and during periods of authorized deferment.
A Direct Stafford Unsubsidized Loan is a student loan for undergraduate and graduate students and is not a need-based student loan. Your expected family contribution (as determined by the FAFSA) will not be used by the school when determining your eligibility for this loan. However, your cost of attendance, other awarded financial aid, and loan limits, will be considered when determining your eligibility of this loan.
Interest begins to accrue (or add up), from the time loan is disbursed, and the responsibility to repay all accrued interest is yours. Unsubsidized loans do not enter repayment until you finish your program, drop below half-time enrollment, or leave school and the six-month grace period for the loan has elapsed. When your loan enters repayment, any unpaid accrued interest will be capitalized (added on) to your original principal balance. However, you always have the option to make payments while you’re in-school, including small payments to cover accruing interest – and this is highly encouraged!
PLUS Loan is a federal student loan offered to parents of dependent undergraduate students and graduate or professional students. Prospective borrowers of a PLUS loan will need to complete a PLUS Loan application and authorize a credit check. The credit check doesn’t review a borrower’s credit score, it’s looking to see if the borrower has adverse credit as determined by the U.S. Department of Education. PLUS Loans will have the highest interest rates and origination fees when compared to other federal student loans.
Parent PLUS Loans are available to the parents of dependent (as determined by the FAFSA) undergraduate students to help their child pay for college. In order to borrow a PLUS Loan for a child, you must be a biological or adoptive parent—however, there are some situations where a stepparent may be eligible. Other family members or guardians are not able to borrow a PLUS Loan for a child. Parent PLUS borrowers are limited in their repayment options of their Parent PLUS Loan.
Grad PLUS Loans are available to graduate students to help pay for graduate or professional schools.
How to Get a Federal Student Loan
You must complete the FAFSA in order to apply for a federal student loan, because federal student loans are offered by the federal student aid program. These may be included in your student aid package after you complete the FAFSA. When you fill out the FAFSA, you are also applying for federal grants, state, and institutional aid.
You can file the FAFSA in October for a term that begins after the following July. This may seem premature but completing the FAFSA as early as possible allows you to qualify for the most money. Since your FAFSA may be used to apply for state and institutional aid, you want to determine your earliest FAFSA due date—some states are first-come, first-served. Even if you do not think you will qualify for federal money, not all federal student aid is need-based. For example, a Direct Unsubsidized Loan does not consider financial need.
If you are a parent of a dependent undergraduate student, or a graduate or professional student, who wants to borrow a Direct PLUS Loan, the borrower will need to complete an additional Direct PLUS Loan application at StudentAid.gov. If you want to borrow a Direct PLUS Loan, you must authorize the U.S. Department of Education to run a credit check. This credit check is only looking to see if you have adverse credit, as defined by the U.S. Department of Education; the credit check is not looking at your credit score or debt-to-income ratio.
Private Student Loans
Private student loans can be useful for when there are gaps in your funding that are not covered by gift-aid or federal loans. Depending on your eligibility (with or without a cosigner), you may be able to borrow up to your cost of attendance minus other financial aid received. Just because you are receiving federal money does not mean that all your costs of college will be covered If you need to borrow a private student loan, make sure to do your research. Compare terms, interest rates, and choose a lender that best fits your needs.
Compare Featured Lenders
- Competitive fixed and variable APRs starting at 2.49%1
- Multiple repayment options including: full principal and interest, interest-only, deferred, and flat payment
- Flexible payment terms ranging from 5, 8, 10, and 15 years2
- Coverage up to 100% of your school-certified cost of attendance ($1,000 minimum)3
- No origination, application and processing fees, no fees for early repayment
- Apply online in 3 minutes and get an instant credit decision
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 9/15/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
- Variable Rates: 3.37% APR - 13.72% APR. Fixed Rates: 3.75% APR - 13.72% APR. Lowest rates shown include 0.25% interest rate discount with auto debit payments.1
- Apply online in minutes and receive an instant credit result2
- Multiple repayment options from in-school payments to deferred.1 No origination fee or prepayment penalty3
- You may be 4X more like to be approved with a cosigner4 and it may help you get a better rate.
- Only undergraduate student loan that offers 4 months of free Chegg® study help5
- Borrow up to 100% of school-certified expenses, whether you're online or on campus6
Borrow Responsibly
We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Students and families should evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.
Sallie Mae loans are subject to credit approval, identity verification, signed loan documents, and school certification. This loan is available to students at participating schools and is not intended for students pursuing a graduate degree. Student or cosigner must meet the age of majority in their state of residence. Students who are not U.S. citizens or U.S. permanent residents must reside in the U.S., attend school in the U.S., apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident), and provide an unexpired government-issued photo ID. Requested loan amount must be at least $1,000.
1Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. Payments may be required during the grace/separation period depending on the repayment option selected. Variable rates may increase over the life of the loan. Advertised variable rates reflect the starting range of rates and may vary outside of that range over the life of the loan. Advertised APRs assume a $10,000 loan to a borrower who attends school for 4 years and has no prior Sallie Mae loans. The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment.
2From January 1, 2021 to December 31, 2021, instant credit decisions were provided to 98% of applicants. Other applications received credit decisions in 3 to 5 business days.
3Although we do not charge a penalty or fee if you prepay your loan, any prepayment will be applied as outlined in your promissory note-first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.
4Based on a comparison of approval rates for Sallie Mae Smart Option Student Loans for Undergraduate Students who applied with a cosigner versus without a cosigner from May 1, 2020 through April 30, 2021.
5This promotional benefit is provided at no cost to borrowers with undergraduate or graduate loans with a first disbursement between May 1, 2021 and April 30, 2024. Borrowers who reside in, attend school in, or borrow for a student attending school in Maine are not eligible for this benefit. Chegg Study® offers expert Q&A where students can submit up to 20 questions per month. No cash value. Terms and Conditions apply. Please visit http://www.chegg.com/legal/smtermsandconditions for complete details. This offer expires one year after issuance.
6Loan amount cannot exceed the cost of attendance less financial aid received as certified by the school. Sallie Mae reserves the right to approve a lower loan amount than the school-certified amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half time.
Information advertised valid as of 9/26/2022
SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.
Smart Option Student Loans® are made by Sallie Mae Bank. Sallie Mae, the Sallie Mae logo, and other Sallie Mae names and logos are service marks or registered service marks of Sallie Mae Bank. All other names and logos used are the trademarks or service marks of their respective owners.
Edvisors is not the creditor for these loans and is compensated by Sallie Mae for the referral of Sallie Mae loan customers.
© 2022 Sallie Mae Bank. All rights reserved. SLM Corporation and its subsidiaries, including Sallie Mae Bank are not sponsored by or agencies of the United States of America.
- AFFORDABLE variable rates starting at 3.04% APR with Automatic Debit Discount*
- 1% CASH BACK Graduation Reward*
- NON-COSIGNED option may be available for undergraduate juniors and seniors.
- PAY AFTER LEAVING SCHOOL – Customize your loan with flexible repayment options – start payments after graduation.
- FORGET FEES – No application, origination or disbursement fees. No prepayment penalty if you choose to pay your loan off early.
- COVER UP TO 100% of your tuition and eligible living expenses.
* Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs
Rates are effective as of 10/01/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: www.AscentFunding.com/Rates
1% Cash Back Graduation Reward subject to terms and conditions. Click here for details. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.
- Check your eligibility in just 2 minutes
- Flexible repayment options you can choose from
- No fees for origination, disbursement, prepayment, or late payment3
- Skip a payment once per year (once repayment period restarted)4
- Will cover up to 100% of the school's certified cost of attendance
- 9-month grace period (3 months more than most lenders)2
This information is for graduate and undergraduate students attending participating degree-granting schools. Borrowers must be U.S. citizens or U.S. permanent residents if the school is located outside of the United States. Non-U.S. citizen borrowers who reside in the U.S. are eligible with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident) and are required to provide an unexpired government-issued photo ID to verify identity. Applications are subject to a requested minimum loan amount of $1,000. Current credit and other eligibility criteria apply.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.47% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.80% APR to 11.69% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.
1You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
2Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
3Earnest does not charge fees for origination, late payments, or prepayments. Florida Stamp Tax: For Florida
residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1.
4Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
The information provided on this page is updated as of 9/19/2022. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information.
Up to four repayment types (including no payments while in school) and multiple repayment terms help you find the loan that fits your budget
- Variable Rates: Starting variable rates range from 2.99% APR - 12.13% APR (with autopay)*, and will never exceed 13.95% (sometimes lower in certain states as required by law)
- Fixed Rates: Fixed rates range from 3.75% APR to 13.60% APR (with autopay)*
- Easy online application!
- No origination fees, late fees, and no insufficient fund fees. Period
- Up to four repayment types (including no payments while in school) and multiple repayment terms help you find the loan that fits your budget
- 0.25% discount when you set up autopay*
*UNDERGRADUATE LOANS: Fixed rates from 3.75% to 13.35% annual percentage rate ("APR") (with autopay), variable rates from 2.99% to 12.13% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.50% to 13.35% APR (with autopay), variable rates from 3.69% to 12.13% APR (with autopay). PARENT LOANS: Fixed rates from 4.23% to 13.60% APR (with autopay), variable rates from 3.09% to 12.13% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 09/02/2022.
Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, years of professional experience, income, and a variety of other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
How to Get a Private Student Loan
If you want to borrow a private student loan, you will need to choose a lender and apply. There are many sites which allow you to easily compare multiple lenders at one time, like our Lender Compare Wall. Loan terms and repayment options are based on your credit, or of your cosigner, if applicable.
Your lenders credit check will review your credit score and history, debt-to-income ratio, and employment history. It will vary between lender, but lenders generally require at least a FICO credit score of 660, a good debt-to-income ratio, and at least two years of employment history. Many college students may need a cosigner to help them qualify for a private student loan. If you don’t have a cosigner to help you qualify, your options may be more limited, but you may still have some.
Shop around for the loan and lender that has the best terms based on your needs.