Knowing how to get student loans with no cosigner is critical if you have no credit, or bad credit, and still need to come up with a significant amount of money to pay for your college education.
While many students lose hope when they find out that most private student loan lenders will always require a cosigner, they seldom realize that there is an abundance of aid available that is not privately funded.
This aid is instead provided by the federal government, and in particular the Department of Education. The government wants its citizens to get a higher education, and understands that most students haven’t had the opportunity to build up their credit in the short amount of time they have officially been considered as adults.
Most of the aid that is provided by the Department of Education is therefore based on other factors besides credit, and can therefore be secured regardless of a positive, and substantial credit history.
Financial Need Is Key
Most federal student aid is based on financial need, which is a result of the following equation.
- Financial Need = Cost of Attendance (CoA) — Expected Family Contribution (EFC)
Expected family contribution, or EFC, is supposed to be used as an indicator of your family’s ability to contribute money towards your education-related expenses. The lower you family’s income, the lower your EFC will be, and the higher your financial need will be.
Other factors also will have an effect on your EFC, including whether or not you are still a dependent or not, the number of family members who may be attending postsecondary institutions, and the size of your family household.
Your EFC will be calculated once you complete the FAFSA, and will be reported to you via your Student Aid Report, or SAR. Having an EFC that is close to, or at zero, will make you eligible for most types of federal student loans, and should also make you qualify for other kinds of federal aid, such as the Pell Grant.
Once you have become eligible, you should be able to get these student loans with no cosigner, as they are not based on credit, and thus don’t require any credit checks, or cosigners.
Stafford and Perkins Loans
There are two specific types of federal student loans that you should be in contention for with regard to your ability to demonstrate the appropriate level of financial need.
These include the Stafford Subsidized Loan, and the Perkins Loan. The Unsubsidized Stafford Loan is not based on need, and can be obtained regardless of your level of financial need. You will therefore be put into contention for the three aforementioned types of federal education loans each time you submit a FAFSA for the following school year.
The Perkins Loan is a unique type of federal student loan in that it is only available at select schools from across the country, unlike Stafford Loans, which are made available at most schools that participate in the federal student aid program.
The Perkins Loan is also very heavily based on need, and only the students who can exemplify the highest financial need will be able to get the Perkins Loan. You don’t have to do anything additional besides complete the FAFSA to be considered for the Perkins Loan, so your best bet is to cross your fingers and hope for the best.
Next we have the Subsidized and Unsubsidized Stafford Loans. These federal education loans are no longer being offered as part of the FFEL Program, as this initiative was deprecated during the passing of the Student Aid and Fiscal Responsibility Act of 2010. These loans are now strictly being offered as part of the Direct Loan Program, and the only thing that you need to understand about this is that they are no longer being provided by private lenders, and are instead being made directly by the Department of Education.
You only need to complete the FAFSA to become eligible for these student loans with no cosigner, as they are based on financial need, and require no additional applications.
The subsidized version will not accrue interest while you are in school, while the unsubsidized version will. Both loans can be taken out at the same time, and each will have specific limits when this is the case. These loan amount limits will gradually increase as you progress through your degree program, with larger amounts being available as you move up in status.
Private Student Loan Availability
You can get a substantial amount of money via federal student loan funding with no credit, no income, and no cosigner. This is why it is critical that you complete the FAFSA as early as you possibly can, and upon knowing the amount of federal aid you have been allocated, you can then proceed to consider other types of financial aid, such as PLUS Loans, and private student loans.
PLUS Loans are federal student loans that are based in-part on credit, and depending on whether or not you are an undergraduate student or not, you may have to convince your parents to apply, as they can only be accessed by your parents if you are still not a graduate student.
You can apply for these types of loans when you’re a graduate, or professional student, and because they come with a fixed interest rate that is set at 7.9%, they are good loans to have if you can get approved.
Once you have exhausted your options in regard to federal, and PLUS Loans, it is then time to consider private student loan funding. This type of student loan is based on credit, and therefore cannot be obtained when you don’t have a cosigner if you have bad credit or no credit.
They come at a higher price than most federal student loans, and PLUS Loans, and have less repayment benefits. They in my opinion should be turned to last when you are engaging on your quest to locate the necessary financial aid to pay for school, and if you can get an approval you should be able to get up to the cost of attendance in aid via a private student loan.
