How to Apply for Student Loans

Learn about the steps to apply for federal and private student loans


If you’re applying to college, there is a chance you’ll also be applying for a student loan. In fact, 55% of people under 30 who went to college took on student loans or other debt to help pay for it, according to the Federal Reserve.

Student loans may be common, but there’s plenty to know about what options are available and how to apply. This article will detail some basics to help you apply for student loans.

Types of Student Loans

Student loans are installment loans, similar to mortgages or car loans. You begin with a starting balance, and you agree to pay it back with interest over time. And there are two types of student loans: federal and private.

Federal student loans are provided by the government via the Federal Direct Loan Program, and the lender is the U.S. Department of Education. Private student loans are typically made by banks or other financial institutions, but Capital One doesn’t currently offer them.

If you’re planning to apply for a student loan, it may help to know a little more about each type of student loan before making such a big decision.

Federal Student Loans

There are four kinds of direct federal student loans:

  1. Subsidized Student Loans: Undergraduate students with financial need can apply for subsidized loans. They’re subsidized because the government pays the interest on the loan during certain periods of the loan. And financial need is determined by comparing how much it costs to attend a school with an estimate of a family’s financial status. You can learn more about how financial need is calculated from the Department of Education. 
  2. Unsubsidized Student Loans: Undergraduate, graduate and professional students can apply for unsubsidized loans. Unlike subsidized loans, potential borrowers don’t need to show financial need. But the loan terms aren’t quite as good as those of subsidized loans because borrowers are responsible for paying interest.
  3. PLUS Loans: Originally short for Parent Loan for Undergraduate Students, this type of loan is available to graduate students, professional students and parents of undergraduates. PLUS loans have higher interest rates, and they require a credit check. Additional steps may be required for people with a poor credit history.
  4. Consolidated Loans: This type of loan allows borrowers to combine all their federal student loans into one loan. Combining loans can simplify things. But there can also be drawbacks to consolidating student loans.

You may have also heard about Perkins Loans, but they are no longer an option. Under federal law, schools stopped making new Perkins Loans in 2017. The Department of Education has more information about federal student loans on its website. 

Private Student Loans

If federal financial aid isn’t an option, then you may want to consider private student loans from a bank or credit union. Sometimes state agencies or schools offer loans, too. 

Private student loans can be taken out by students, but they often require a co-signer, such as a parent. That’s because lenders may want extra assurances the loan will be repaid. 

Private Loans vs. Federal Loans

Federal loans may be a better student loan option than private loans for a variety of reasons. 

Federal loans are typically less expensive than private loans. And federal loans may include benefits that private loans don’t. That includes things like deferred payments, better interest rates, help paying interest, debt consolidation options and loan forgiveness. Private loans may also have additional fees.

Before private student loans can be disbursed, borrowers must fill out a self-certification form to confirm they know all their options. The form is required by law. And it directly encourages borrowers to “pursue the availability of free or lower-cost financial aid.” Your school’s financial aid office and your lender should be able to provide more details if you need the form.

Applying for Federal Student Loans

To apply for a federal student loan, you must first fill out the Free Application for Federal Student Aid (FAFSA®). Deadlines to submit the FAFSA form usually fall at the end of June. But remember, financial aid is sometimes provided on a first-come, first-served basis, so applying earlier is better. 

Once your school has your FAFSA form, it will send you a financial aid offer. That may include a federal loan and directions about what to do next, including entrance counseling and directions about officially agreeing to the loan

Getting in touch with your school’s financial aid office can be helpful to learn more about the process. 

One more thing to keep in mind: You must reapply for federal student aid every school year. 

Applying for PLUS Loans

PLUS loans can function a little differently. They can sometimes require additional steps to complete the process. Once you fill out your Direct PLUS Loan application, the school you select will use that information to check whether you’re eligible.

Applying for Private Student Loans 

Applying for a private student loan can be similar to the process of applying for a car loan or a personal loan. But remember, sometimes a co-signer is required.

While federal student loans might be based on financial need, private loans are different. They’re based on credit history. Having a co-signer who has good credit may increase your chances for approval. It may also help get you a better interest rate. 

There are numerous variables to consider when shopping for a private loan—interest rates, loan protection, payment plans and lender reputations. Comparing loan offers and talking to an expert can help you figure out what’s best for you. 

Applying for Student Loans During COVID-19

Like most things, the coronavirus affected student loans and student aid. The Department of Education says it’s monitoring the situation. You can find the latest information about student loans and COVID-19 on the agency’s website.

Other Student Financial Aid and Payment Options

Student loans are just like any other type of loan: It’s a good idea to do as much research as possible to find the right loan for you. Consulting with a qualified financial professional is also a helpful step.

And don’t forget, student loans may not be your only option. Financial aid in the form of things like grants, scholarships and work-study programs may also be available.

If you do end up with federal or private student loans, you can learn more from Capital One about how to pay off student loans.


Learn more about Capital One’s response to COVID-19 and resources available to customers. For information about COVID-19, head over to the Centers for Disease Control and Prevention

Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

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