• Paying for College

FAQs about student loans

Key takeaways

  • Federal and private student loans are common ways to help cover college costs, though terms and eligibility differ.
  • Completing the FAFSA each year is required to access federal aid and many school-based financial aid opportunities.
  • For private loans, you’ll have to complete applications through private lenders each year or apply for Multi-Year Approval.†

Navigating the cost of college can feel overwhelming especially when it comes to student loans. In this handy guide, we cover many of the FAQs about student loans we've seen over the years so you can make more informed decisions about your finances today and in the future.

FAFSA FAQs

Federal student loans FAQs

Private student loans FAQs

General student loans FAQs

FAFSA FAQs

What is the FAFSA?

The Free Application for Federal Student Aid (FAFSA) is the federal form to apply for monetary aid for college. You are only eligible for federal student aid if you complete the FAFSA, and many colleges and universities also use your answers to determine whether you qualify for institutional and state programs, including some merit-based awards.

Where do I complete the FAFSA?

You can complete the FAFSA on the studentaid.gov website or by mail, but the online version is much faster. For the online form, you need to create a Federal Student Aid (FSA) account.

When do I complete the FAFSA?

The FAFSA for the following academic year opens on October 1. For example, if you're going to college during the 2027-2028 academic year, that FAFSA becomes available on October 1, 2026.

Complete the application as soon as possible. Some programs have very early deadlines and a late submission could result in a smaller financial aid package.

You need to complete the FAFSA each year you're in college, if you'd like to apply for aid.

Should I submit the FAFSA even if I don't have financial need?

Yes, you should submit the FAFSA even if you don't have financial need. Many institutions use the form to determine their financial aid packages, which can include merit-based scholarships and grants. You could be passing up gift aid by not completing the form.

Even if you didn't qualify for any aid the previous year, still submit your FAFSA. Income requirements change year-to-year, you might be eligible for different institutional awards, and colleges regularly add new financial aid programs.

When is the FAFSA due?

The FAFSA is due June 30th of the academic year. For instance, the 2027-2028 FAFSA is due on June 30th 2028.

Colleges, state aid programs, and other organizations that offer financial aid have much earlier deadlines for the FAFSA. Most schools and programs require the form by January or February, but programs with priority deadlines or severely limited funds could have much earlier due dates. You should always complete the FAFSA as soon as possible to maximize your potential financial aid offer.

Visit your college's website to learn more about their financial aid deadlines.

Federal student loans FAQ

What are direct loans?

Federal direct loans are student loans through the U.S. Department of Education. There are three types:

  • Direct Subsidized Loans: The government pays for interest on subsidized loans while the student is in school and during the six months after the student graduates or leaves college. With a 6.52% interest rate for loans disbursed after July 1, 2026, they're only available to undergraduates with demonstrated financial need.
  • Direct Unsubsidized Loans: Interest begins accumulating immediately on unsubsidized loans and the student is responsible for the interest. Undergraduate, graduate and professional students are eligible. Between July 1, 2026, and July 1, 2027, they have a 6.52% interest rate for undergraduates and 8.07% interest rate for graduate and professional students.
  • Parent PLUS: PLUS loans are available to parents of students. It requires a separate application in addition to the FAFSA, and the parent is responsible for paying back the loan. Loans disbursed after July 1, 2026 and before July 1, 2027 have a 9.07% fixed interest rate. The Federal Direct GradPLUS Loan program for graduate students is ending on July 1, 2026.

How do I apply for federal direct loans?

You must complete the FAFSA if you want to apply for federal direct loans.

How much can I borrow through direct loans?

How much you can borrow through federal direct loans depends on several factors, including:

  • Your financial situation: You can only take out direct subsidized loans if you have demonstrated financial need.
  • Enrollment status: Students who are enrolled full-time can often borrow more than those who are enrolled below full-time.
  • Year of studies: Where you are in your college education can affect how much you can borrow. A second-year undergraduate can borrow more than a first-year student. A graduate student can't take out Direct Subsidized Loans at all, but they're eligible to borrow more from Unsubsidized Loans than undergraduates.
  • Independent vs. dependent student: Independent students (as determined by your FAFSA) can often take out more in federal loans than dependent students.
  • Loan caps: How much you can borrow in federal loans is also capped by loan type and over your lifetime. For instance, a first-year dependent student can take out up to $5,500 in federal student loans, of which only $3,500 can be a Subsidized Loan. Those in their third or fourth years can borrow up to $7,500 per year (up to $5,500 in a Subsidized Loan). All told, you cannot borrow more than $31,000 as an undergraduate.
  • College: Your college determines how much you can take out in student loans each year. You can find this information on your financial aid offer. Typically, you can only borrow up to the cost of attendance minus any other financial aid you're receiving, up to the caps determined by the government.

Private student loans FAQ

How do you apply for private student loans?

You can apply for private student loans through private lenders, such as banks and credit unions.

What is Multi-Year Approval?

Multi-Year Approval at Citizens allows you to submit one application for your entire degree program.† If approved, you'll receive an offer for the total amount you can borrow while you pursue your degree, taking money out of this total as needed each year.

You'll need to pass a soft credit check for the following years to make sure your financial situation hasn't drastically changed, but you won't have to submit another application or provide income verification.

General student loans FAQs

What is a financial aid offer letter?

A financial aid offer letter or award letter is the document you receive from a college, university, or other institution that outlines how much financial aid you're being offered should you attend that school. It can include federal loans, federal grants, institutional grants and scholarships, state aid and more. It will not include any private student loans.

What if my financial aid offer isn't enough to cover the cost of attendance?

If your financial aid offer doesn't cover the cost of attending your college, you have a few options:

  • Appeal the decision. Many schools offer you the ability to appeal your financial aid award, especially if your financial situation has changed drastically in recent years.
  • Apply for private student loans. Private student loans may be able to cover the gap between your award and the cost of attendance. However, many undergraduates have limited income and little to no credit history, so they often need a cosigner for approval.
  • Use savings. If possible, dipping into your savings or working through college can help you make up the difference.
  • Consider another school. You might find that the cost of attending a college is just too high and not a manageable amount.

Are there student loans available for parents?

Yes, there are federal and private student loans for parents.

The federal government offers Parent PLUS loans. It doesn't require a credit check, but the government will make sure you don't have an adverse credit history.

Some private lenders also have student loans for parents.†

What do student loans pay for?

Student loans cover education-related expenses, such as tuition, fees, books, supplies, transportation and room and board.

Using the money for unapproved expenses can result in having to pay the money back right away, fines and/or jail time.

Will taking out a student loan impact my credit score negatively?

Taking out a student loan won't necessarily impact your credit score negatively. Your credit score is made up of several different factors.

Who do I speak to if I have questions about my student loans?

Who you speak to in regards to your student loans depends on the loan source.

For questions about federal student loans, you can contact your loan servicer, the Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800-433-3243) or your college's financial aid department.

If you have questions about your private student loans, reach out to your lender.

How are student loans different from personal loans?

You must be a student in order to qualify for a student loan. Student loans tend to have much lower interest rates with more flexible terms than personal loans.

You can use a personal loan for a variety of expenses, while a student loan can only be used for education-related expenses.

Ready to take the next step?

Before you take out private student loans, visit the Student Hub to make sure you've exhausted other options like federal aid, grants and scholarships. And if that's not quite enough, Citizens is here to help you navigate your student loan options. Visit our Student Lending page for more information or connect with a Student Loan Advisor at 866-999-0077.†