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Student Loan Frequently Asked Questions

Key Takeaways

  • After receiving a financial aid award letter from their school, many students are still left with a balance.
  • Private and federal student loan options are available to cover the financing gap.
  • Parents may take out education loans for their children.

You've got questions about a complex subject — student loans. Fortunately, there are answers.


Direct Loans


What loans can I get?

How often do I need to apply?


Where can I get a Free Application for Federal Student Aid (FAFSA) form to complete?

The FAFSA is the application for federal student aid, such as grants, work-study, and federal student loans. In addition, many states and colleges utilize the FAFSA to determine eligibility for state and school aid.

You can fill out the form online at www.fafsa.ed.gov. Students are strongly encouraged to apply online, but if you prefer, you can complete a paper version of the FAFSA and send it via mail. Check with your high school guidance counselor or college financial aid office for a paper form.

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Direct Loans

How do I apply for Federal Direct Loans?

You will need to complete the FAFSA form. This form will enable your college to determine your eligibility for all types of federal aid, including the Federal Direct Loan. After you find out whether you are eligible for the Federal Direct Loan, you will need to complete a Federal Direct Loan Master Promissory Note (MPN). Visit the federal student aid site for more information about the Direct Loan program.

How much can I borrow through the Federal Direct Loan program?

If you are a dependent student, the maximum you can borrow under the Federal Direct Loan is $5,500 as a freshman, $6,500 as a sophomore, and $7,500 as a junior and senior. If you are an independent student, the maximum amounts are $9,500 as a freshman, $10,500 as a sophomore, and $12,500 as a junior and senior.

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How do I get my hands on my official transcript? And what is it?

The transcript is your official high school academic record. It contains a list of your courses and grades, an explanation of the school's grading scale, and a list of the school's course offerings.

Check with your high school guidance counselor to find out what you need to do to get transcripts sent to your selected schools. There may be a minimal charge for sending them. Keep deadlines in mind and allow plenty of time to get your transcripts out the door.

I was homeschooled and I don't have an official transcript. What should I do?

If you have been homeschooled, you may not follow the typical transcript or testing scenarios. Instead, you might be able to substitute a portfolio of your best work, a logbook of your community activities, or college credits earned before applying for admissions. Check with the schools you're applying to in order to find out what they need.

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What loans can I get?

I have received my financial aid award letter, but I still owe money to the school. Are there other loans I can apply for?

Yes, consider taking out a private bank loan. In general, private loans allow you to borrow whatever else you need to cover your balance for the year. These loans are credit-based, so most students will probably require a creditworthy co-signer, such as a parent or legal guardian.

Is there a loan my parents can take out for my education?

Yes, many private lenders, as well as the federal government, offer student loans for parents.

The Federal Direct Plus Loan for parents has fixed rates set by Congress and allows your parents to borrow up to your cost of attendance, minus any other financial assistance received. However, it's possible you could find a lower-cost alternative through a private lender, which generally awards interest rates based on the applicant's credit score. In addition, many private lenders do not charge an origination fee while the Direct PLUS does.

Private student loans for parents are available through banks, credit unions, and other financial institutions, and offer a range of interest rate and repayment options. As mentioned before, approval is based on creditworthiness, so you may get lower interest rates than you could on a federal loan, as well as fewer or no fees. Therefore, a private parent loan may be a less expensive option.

After estimating the total amount you'll pay with each option, it's important to compare them to find the best fit for you and your family.

Can I borrow a loan to help pay for my books and my personal expenses while I am at school?

Yes. Private student loans, as well as the Federal Direct PLUS Loan, can be used to help pay for your indirect costs while you are enrolled in school. The maximum you can borrow each year is determined by your individual school.

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How often do I need to apply?

Do I need to apply for financial aid each year?

Yes. You will need to complete the FAFSA form each year. Every year you will receive a new financial aid award letter from your school.

Do I have to fill out a new MPN each year?

Not usually. These forms are good for 10 years. You may have to fill out a new form if you change schools or change your lender.

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More information

We are committed to helping you reach your potential. If you have questions, or would like more information, call 1-888-411-0266 to speak to a Student Lending Specialist, visit us online, or visit your nearest Citizens Bank branch.

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