Federal Student Loans

Federal Student Loans Archives - Sparrow Nest

Private Student Loans

Private Student Loans Archives - Sparrow Nest

<p>Typically, it’s recommended that borrowers have a good credit score to access competitive student loan offers. But what if you have no credit at all?</p>
<p>Don’t fret — there are a variety of student loan options for borrowers with no credit.</p>
<p>Keep reading to learn how you can get student loans with no credit and to explore our top picks for lenders.</p>


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<h2 id="h-can-you-get-student-loans-if-you-don-t-have-credit" class="wp-block-heading"><strong>Can You Get Student Loans if You Don’t Have Credit?</strong></h2>
<p>It depends on the <em>type</em> of loan you are borrowing. For <a href="https://www.sparrowfi.com/blog/how-to-get-federal-student-loans-with-bad-credit">federal loans</a>, you do not need to have credit to qualify. On the flip side, most private student loans will require you to have a <a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">strong credit history</a>.</p>
<p>However, there are still private loan options for those without a credit history. Borrowers can either apply for non-credit-based loan options or have <a href="https://www.sparrowfi.com/blog/what-is-a-private-student-loan-cosigner">a cosigner</a> with a strong credit history cosign their loan. That said, borrowers should consider a cosigned loan option before non-cosigned, non-credit-based loans because the interest rates can be higher for the latter.</p>


<h2 id="h-student-loan-options-if-you-have-no-credit" class="wp-block-heading"><strong>Student Loan Options if You Have No Credit</strong></h2>
<p>There are plenty of loan options available for prospective borrowers without any credit.</p>
<h3 id="h-federal-student-loans" class="wp-block-heading"><strong>Federal Student Loans</strong></h3>
<p>Experts recommend that borrowers exhaust their federal loan options before resorting to private loans. Federal loans have <a href="https://www.sparrowfi.com/blog/what-is-the-average-federal-student-loan-interest-rate">controlled interest rates</a>, strong borrower benefits, and various<a href="https://www.sparrowfi.com/blog/how-to-select-the-best-federal-student-loan-repayment-option"> repayment plans</a>, making them the preferred option.</p>
<p>Generally, most federal student loans have fixed interest rates that are set by Congress. This means that the interest rate on the loan will never change, protecting your interest rate from fluctuations due to the economy.</p>
<p>To borrow a federal student loan, you’ll need to <a href="https://www.sparrowfi.com/blog/6-simple-steps-to-fill-out-fafsa">submit the Free Application for Federal Student Aid (FAFSA)</a>. The FAFSA opens on October 1st and closes on June 30th.</p>


<h3 id="h-private-student-loans" class="wp-block-heading"><strong>Private Student Loans</strong></h3>
<p>If you opt for private student loans, look into the lenders below. Rather than searching for lenders one-by-one, we recommend comparing your no credit options with an automated <a href="https://www.sparrowfi.com/">student loan search tool</a>. With the free <a href="https://www.sparrowfi.com/sign-up">Sparrow application</a>, you can see the rates and terms you’d qualify for with 17+ premier lenders.</p>
<p><strong>Here are the best private student loans for no credit</strong>:</p>


<h4 id="h-ascent-non-cosigned-outcomes-based-loan" class="wp-block-heading"><strong><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000" target="_blank" rel="noreferrer noopener">Ascent Non-Cosigned, Outcomes-Based Loan</a></strong></h4>
<p><a href="https://www.sparrowfi.com/blog/ascent-student-loan-review">Ascent’s</a> Non-Cosigned, Outcomes-Based loan is a great option for high school upperclassmen (including DACA recipients and international students) with limited credit/income and no cosigner. Qualifying students must have a GPA above 2.9.</p>


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<h4 id="h-edly-ibr-loan" class="wp-block-heading"><strong><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000" target="_blank" rel="noreferrer noopener">Edly IBR Loan</a></strong></h4>
<p>Edly’s income-based repayment (IBR) loan is not like your average student loan. Students who are approved for an <a href="https://www.sparrowfi.com/blog/edly-private-student-loans-review">Edly IBR loan</a> do not make payments during school but can make payments based on their income after graduation.</p>
<p>IBR loans are best for borrowers who want a loan that doesn’t require a cosigner or have a minimum credit score, <em>in addition</em> to flexible repayment plans and competitive repayment terms.</p>
<p>The APR on an IBR loan depends on your projected income, but the Edly IBR loan has a maximum 24% APR.</p>


<h4 id="h-funding-u" class="wp-block-heading"><strong><a href="https://www.funding-u.com/referrer/Sparrow?cm=&amp;cn=Sparrow&amp;cs=Sparrow&amp;redirect_path=%2F&amp;utm_campaign=Sparrow&amp;utm_medium=&amp;utm_source=Sparrow&amp;referrersubid=" target="_blank" rel="noreferrer noopener">Funding U</a></strong></h4>
<p>If you are a high-achieving undergraduate student with limited credit history and income, <a href="https://www.sparrowfi.com/blog/funding-u-private-student-loan-review">Funding U</a> is the lender for you.</p>
<p>Funding U offers student loans <em>without</em> a cosigner, credit history, or income. Your eligibility as a borrower depends on your GPA and estimated future earnings.</p>


<h4 id="h-mpower" class="wp-block-heading"><strong><a href="https://www.mpowerfinancing.com/get-a-loan/?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000" target="_blank" rel="noreferrer noopener">MPOWER</a></strong></h4>
<p>MPOWER offers non-cosigned loans to domestic, international, and DACA undergraduate and graduate students. <a href="https://www.sparrowfi.com/blog/mpower-private-student-loan-review">MPOWER</a> is available in all 50 states and offers special discount rates for responsible borrowing.</p>


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<p>If you want to skip pre-qualification and apply directly with a lender, you can do so by clicking <b>Apply</b> below.</p>


The latest rates from Sparrow’s partners

<h2 id="h-closing-thoughts-from-the-nest" class="wp-block-heading"><strong>Closing Thoughts from the Nest</strong></h2>
<p>As a borrower, finding the best loan option for you is important for your future finances. As you sift through your options, be sure to compare loans across interest rates, repayment plans, and borrower protections.</p>
<p>To <a href="https://www.sparrowfi.com/">check your rates across multiple lenders at once</a>, consider using <a href="https://www.app.sparrowfi.com/login/type">Sparrow&#8217;s free search engine</a>. You can review personalized offers from over 15 different lenders <em>without</em> harming your credit score.</p>


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Typically, it’s recommended that borrowers have a good credit score to access competitive student loan offers. But what if you have no credit at all?

Don’t fret — there are a variety of student loan options for borrowers with no credit.

Keep reading to learn how you can get student loans with no credit and to explore our top picks for lenders.

<h4 id="h-mpower" class="wp-block-heading"><strong><a href="https://www.mpowerfinancing.com/get-a-loan/?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000" target="_blank" rel="noreferrer noopener">MPOWER</a></strong></h4>
MPOWER offers non-cosigned loans to domestic, international, and DACA undergraduate and graduate students. <a href="https://www.sparrowfi.com/blog/mpower-private-student-loan-review">MPOWER</a> is available in all 50 states and offers special discount rates for responsible borrowing.

If you want to skip pre-qualification and apply directly with a lender, you can do so by clicking <b>Apply</b> below.

<h2 id="h-closing-thoughts-from-the-nest" class="wp-block-heading"><strong>Closing Thoughts from the Nest</strong></h2>
As a borrower, finding the best loan option for you is important for your future finances. As you sift through your options, be sure to compare loans across interest rates, repayment plans, and borrower protections.

To <a href="https://www.sparrowfi.com/">check your rates across multiple lenders at once</a>, consider using <a href="https://www.app.sparrowfi.com/login/type">Sparrow's free search engine</a>. You can review personalized offers from over 15 different lenders <em>without</em> harming your credit score.

<h2 id="h-can-you-get-student-loans-if-you-don-t-have-credit" class="wp-block-heading"><strong>Can You Get Student Loans if You Don’t Have Credit?</strong></h2>
It depends on the <em>type</em> of loan you are borrowing. For <a href="https://www.sparrowfi.com/blog/how-to-get-federal-student-loans-with-bad-credit">federal loans</a>, you do not need to have credit to qualify. On the flip side, most private student loans will require you to have a <a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">strong credit history</a>.

However, there are still private loan options for those without a credit history. Borrowers can either apply for non-credit-based loan options or have <a href="https://www.sparrowfi.com/blog/what-is-a-private-student-loan-cosigner">a cosigner</a> with a strong credit history cosign their loan. That said, borrowers should consider a cosigned loan option before non-cosigned, non-credit-based loans because the interest rates can be higher for the latter.

<h2 id="h-student-loan-options-if-you-have-no-credit" class="wp-block-heading"><strong>Student Loan Options if You Have No Credit</strong></h2>
There are plenty of loan options available for prospective borrowers without any credit.
<h3 id="h-federal-student-loans" class="wp-block-heading"><strong>Federal Student Loans</strong></h3>
Experts recommend that borrowers exhaust their federal loan options before resorting to private loans. Federal loans have <a href="https://www.sparrowfi.com/blog/what-is-the-average-federal-student-loan-interest-rate">controlled interest rates</a>, strong borrower benefits, and various<a href="https://www.sparrowfi.com/blog/how-to-select-the-best-federal-student-loan-repayment-option"> repayment plans</a>, making them the preferred option.

Generally, most federal student loans have fixed interest rates that are set by Congress. This means that the interest rate on the loan will never change, protecting your interest rate from fluctuations due to the economy.

To borrow a federal student loan, you’ll need to <a href="https://www.sparrowfi.com/blog/6-simple-steps-to-fill-out-fafsa">submit the Free Application for Federal Student Aid (FAFSA)</a>. The FAFSA opens on October 1st and closes on June 30th.

<h3 id="h-private-student-loans" class="wp-block-heading"><strong>Private Student Loans</strong></h3>
If you opt for private student loans, look into the lenders below. Rather than searching for lenders one-by-one, we recommend comparing your no credit options with an automated <a href="https://www.sparrowfi.com/">student loan search tool</a>. With the free <a href="https://www.sparrowfi.com/sign-up">Sparrow application</a>, you can see the rates and terms you’d qualify for with 17+ premier lenders.

<strong>Here are the best private student loans for no credit</strong>:

<h4 id="h-ascent-non-cosigned-outcomes-based-loan" class="wp-block-heading"><strong><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000" target="_blank" rel="noreferrer noopener">Ascent Non-Cosigned, Outcomes-Based Loan</a></strong></h4>
<a href="https://www.sparrowfi.com/blog/ascent-student-loan-review">Ascent’s</a> Non-Cosigned, Outcomes-Based loan is a great option for high school upperclassmen (including DACA recipients and international students) with limited credit/income and no cosigner. Qualifying students must have a GPA above 2.9.

<h4 id="h-edly-ibr-loan" class="wp-block-heading"><strong><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000" target="_blank" rel="noreferrer noopener">Edly IBR Loan</a></strong></h4>
Edly’s income-based repayment (IBR) loan is not like your average student loan. Students who are approved for an <a href="https://www.sparrowfi.com/blog/edly-private-student-loans-review">Edly IBR loan</a> do not make payments during school but can make payments based on their income after graduation.

IBR loans are best for borrowers who want a loan that doesn’t require a cosigner or have a minimum credit score, <em>in addition</em> to flexible repayment plans and competitive repayment terms.

The APR on an IBR loan depends on your projected income, but the Edly IBR loan has a maximum 24% APR.

<h4 id="h-funding-u" class="wp-block-heading"><strong><a href="https://www.funding-u.com/referrer/Sparrow?cm=&amp;cn=Sparrow&amp;cs=Sparrow&amp;redirect_path=%2F&amp;utm_campaign=Sparrow&amp;utm_medium=&amp;utm_source=Sparrow&amp;referrersubid=" target="_blank" rel="noreferrer noopener">Funding U</a></strong></h4>
If you are a high-achieving undergraduate student with limited credit history and income, <a href="https://www.sparrowfi.com/blog/funding-u-private-student-loan-review">Funding U</a> is the lender for you.

Funding U offers student loans <em>without</em> a cosigner, credit history, or income. Your eligibility as a borrower depends on your GPA and estimated future earnings.

Here are the best private student loans for no credit: Funding U offers loans without a cosigner or credit history. See more options...

How to Get Student Loans with No Credit (December 2024)

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<p>Given the <a href="https://www.sparrowfi.com/blog/the-average-cost-of-college-in-the-united-states">rising cost of college</a>, finding affordable college financing is more important than ever. As a parent, it’s both understandable and admirable to want to support your child through the process of paying for college. It&#8217;s essential that you have the tools to pick the best college loan.</p>
<p>If you’re curious about your parent loan options, you’re in the right place. Here’s what you need to know to pick the best college loan for parents.</p>


<h2 id="best-parent-loans" class="wp-block-heading"><strong>Best College Loans for Parents</strong></h2>
<p>The best parent loan for you will ultimately be the one that suits your needs best. However, having a list of options that offer competitive interest rates, flexible repayment options, and strong customer service will make the search process easier.</p>
<p>The following are our top picks for the best private college loans for parents.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/parent-student-loan">Compare best student loan rates for parents</a></p>


<h2 id="parent-loans-traditional" class="wp-block-heading"><strong>Parent Loans vs. Traditional Private Student Loans</strong></h2>
<p>While parent loans and traditional private student loans are similar in nature, there are some key differences you’ll want to consider before choosing one over the other.</p>
<p>A parent loan allows you to borrow on behalf of your child to finance their education. While you may require your child to make payments directly to you, you are legally the sole person responsible for paying back the loan.</p>
<p>A traditional student loan, however, is one that your child borrows on their own behalf. If you cosign the student loan, <em>both </em>you and your child are legally responsible for paying back the loan.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/how-to-apply-for-student-loans-step-by-step-guide">How to apply for a student loan</a></p>


<h2 id="compare-parent-loans" class="wp-block-heading"><strong>How to Compare College Loans for Parents</strong></h2>
<p>Both federal and private lenders offer parent loans. While similar in that parents can borrow both loan types on behalf of their child, they differ in several ways.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Student loan eligibility: Federal and Private loans</a></p>


<h3 class="wp-block-heading"><strong>Federal Parent PLUS Loan</strong></h3>
<p>The only federal student loan parents can borrow on behalf of their child is the Parent PLUS Loan. To <a href="https://studentaid.gov/understand-aid/types/loans/plus/parent">receive a Parent PLUS Loan</a>, you must:</p>
<ul>
<li>Be the biological or adoptive parent of a dependent undergraduate student who is enrolled at least half-time at an eligible school</li>
<li>Not have an adverse credit history</li>
<li>Meet the general requirements to receive federal student aid</li>
</ul>
<p>The interest rate for Parent PLUS Loans is fixed and set by the government each year. For Parent PLUS Loans disbursed on or after July 1, 2022 and before July 1, 2023, the interest rate is <a href="https://studentaid.gov/understand-aid/types/loans/plus/parent">7.54%</a>.</p>
<p>Like other federal student loans, Parent PLUS Loans have the opportunity to be forgiven, which is <em>not </em>available for private student loans. This is an important factor to consider if you plan to pursue any <a href="https://www.sparrowfi.com/blog/parent-plus-loan-forgiveness-everything-you-need-to-know">loan forgiveness programs</a>.</p>
<p><strong>&gt;&gt; MORE:</strong> <a href="https://www.sparrowfi.com/blog/parent-plus-loan-forgiveness-everything-you-need-to-know">Parent PLUS loan forgiveness: Everything you need to know</a></p>
<p>Before borrowing a Parent PLUS Loan, you should <a href="https://www.sparrowfi.com/sign-up">check to see what rates you qualify for</a> in private parent loans. You may find that some private lenders are able to offer you rates lower than the Parent PLUS Loan interest rate.</p>


<h3 class="wp-block-heading"><strong>Private Parent Loans</strong></h3>
<p>Private parent loans are provided by private student loan lenders. Unlike federal Parent PLUS Loans, each individual private lender will offer different interest rates and terms. The eligibility criteria for private parent loans will vary, but in general, you must:</p>
<ul>
<li>Meet income and/or credit requirements</li>
<li>Be borrowing on behalf of a student attending an eligible school</li>
</ul>
<p>While it is commonly assumed that private student loans <em>always </em>have higher interest rates than federal student loans, that isn’t necessarily true. You should always compare both federal and private parent loan options before agreeing to one or the other.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Federal vs Private student loans: Comparison</a></p>


Compare personalized student loan rates

<h2><strong>Commonly Asked Questions About College Loans for Parents</strong></h2>
<p></p>
<h3 class="wp-block-heading"><strong>What is the best way for parents to pay for college?</strong></h3>
<p>There is no single best way for parents to pay for their child’s college education. Generally speaking, however, you should begin by encouraging your child to pursue <a href="https://www.sparrowfi.com/blog/top-6-college-scholarship-sites">scholarship</a> and grant opportunities. Both forms of aid do <em>not </em>need to be repaid.</p>
<p>Following that, consider what you’re able to <a href="https://www.sparrowfi.com/blog/the-best-ways-to-start-saving-for-college">contribute out-of-pocket</a>. It’s important to minimize the amount you need to borrow.</p>
<p>After you’ve exhausted both options, consider both federal and private student loans.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">What are the different types of financial aid</a></p>

<h3><strong>Is it better to borrow a Parent PLUS Loan or a private parent loan?</strong></h3>
<p>One option isn’t necessarily better than the other. If you plan to pursue any loan forgiveness programs, you may prefer a Parent PLUS Loan over a private parent loan. If you are more concerned with finding a competitive interest rate, however, you may find that a private parent loan suits you better.</p>


<h3 class="wp-block-heading"><strong>Do parents need good credit for student loans?</strong></h3>
<p>It depends on the lender. While most federal student loans do <em>not </em><a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">factor your credit score</a> into your eligibility, private student loans often do. That said, there are a variety of private student lenders that work with parent borrowers with lower credit scores.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/best-student-loans-for-parents-with-bad-credit">Best student loans for parents with bad credit</a></p>


<h3 class="wp-block-heading"><strong>How much can parents borrow for student loans?</strong></h3>
<p>In Parent PLUS Loans, you may be eligible to borrow up to the cost of attendance at your child’s school minus any other aid your child receives.</p>
<p>In private parent loans, the <a href="https://www.sparrowfi.com/blog/student-loan-limits-how-much-can-you-borrow-in-student-loans">borrowing limit</a> will vary by lender.</p>


<h3 class="wp-block-heading"><strong>How do parents take out loans for college?</strong></h3>
<p>To borrow Parent PLUS Loans, complete the <a href="https://studentaid.gov/plus-app/">PLUS Loan application</a> online.</p>
<p>To borrow private parent loans, see what rates you qualify for by completing the <a href="https://www.sparrowfi.com/sign-up">Sparrow application</a>. In less than 3 minutes, we’ll show you which parent loans you qualify for and at what rates.</p>


<h2 class="wp-block-heading"><strong>Final Thoughts from the Nest</strong></h2>
<p> </p>
<p>There are a variety of parent loan options available, and while beneficial, it can make the process of picking the best option overwhelming. To simplify the process, start with Sparrow. Rather than searching endlessly for a parent loan that works for you, fill out the <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>, and we’ll do the search for you. We’ll show you which parent loans you pre-qualify for and at what rate so you can find the best option for you.</p>

<p><em>Sparrow&#8217;s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em></p>
<p><em>Some rates listed may include an Autopay Discount, which requires you to agree to make your monthly payments by an automatic monthly deduction (ACH) from a valid bank account. To verify whether the interest rates listed include an Autopay Discount, please read the individual lender disclosures.</em></p>


Given the <a href="https://www.sparrowfi.com/blog/the-average-cost-of-college-in-the-united-states">rising cost of college</a>, finding affordable college financing is more important than ever. As a parent, it’s both understandable and admirable to want to support your child through the process of paying for college. It's essential that you have the tools to pick the best college loan.

If you’re curious about your parent loan options, you’re in the right place. Here’s what you need to know to pick the best college loan for parents.

<h3><strong>Is it better to borrow a Parent PLUS Loan or a private parent loan?</strong></h3>
One option isn’t necessarily better than the other. If you plan to pursue any loan forgiveness programs, you may prefer a Parent PLUS Loan over a private parent loan. If you are more concerned with finding a competitive interest rate, however, you may find that a private parent loan suits you better.

<h3 class="wp-block-heading"><strong>Do parents need good credit for student loans?</strong></h3>
It depends on the lender. While most federal student loans do <em>not </em><a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">factor your credit score</a> into your eligibility, private student loans often do. That said, there are a variety of private student lenders that work with parent borrowers with lower credit scores.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/best-student-loans-for-parents-with-bad-credit">Best student loans for parents with bad credit</a>

<h3 class="wp-block-heading"><strong>How much can parents borrow for student loans?</strong></h3>
In Parent PLUS Loans, you may be eligible to borrow up to the cost of attendance at your child’s school minus any other aid your child receives.

In private parent loans, the <a href="https://www.sparrowfi.com/blog/student-loan-limits-how-much-can-you-borrow-in-student-loans">borrowing limit</a> will vary by lender.

<h3 class="wp-block-heading"><strong>How do parents take out loans for college?</strong></h3>
To borrow Parent PLUS Loans, complete the <a href="https://studentaid.gov/plus-app/">PLUS Loan application</a> online.

To borrow private parent loans, see what rates you qualify for by completing the <a href="https://www.sparrowfi.com/sign-up">Sparrow application</a>. In less than 3 minutes, we’ll show you which parent loans you qualify for and at what rates.

<h2 class="wp-block-heading"><strong>Final Thoughts from the Nest</strong></h2>
 

There are a variety of parent loan options available, and while beneficial, it can make the process of picking the best option overwhelming. To simplify the process, start with Sparrow. Rather than searching endlessly for a parent loan that works for you, fill out the <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>, and we’ll do the search for you. We’ll show you which parent loans you pre-qualify for and at what rate so you can find the best option for you.

<em>Sparrow's goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em>

<em>Some rates listed may include an Autopay Discount, which requires you to agree to make your monthly payments by an automatic monthly deduction (ACH) from a valid bank account. To verify whether the interest rates listed include an Autopay Discount, please read the individual lender disclosures.</em>

<h2 id="best-parent-loans" class="wp-block-heading"><strong>Best College Loans for Parents</strong></h2>
The best parent loan for you will ultimately be the one that suits your needs best. However, having a list of options that offer competitive interest rates, flexible repayment options, and strong customer service will make the search process easier.

The following are our top picks for the best private college loans for parents.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/parent-student-loan">Compare best student loan rates for parents</a>

<h2 id="parent-loans-traditional" class="wp-block-heading"><strong>Parent Loans vs. Traditional Private Student Loans</strong></h2>
While parent loans and traditional private student loans are similar in nature, there are some key differences you’ll want to consider before choosing one over the other.

A parent loan allows you to borrow on behalf of your child to finance their education. While you may require your child to make payments directly to you, you are legally the sole person responsible for paying back the loan.

A traditional student loan, however, is one that your child borrows on their own behalf. If you cosign the student loan, <em>both </em>you and your child are legally responsible for paying back the loan.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/how-to-apply-for-student-loans-step-by-step-guide">How to apply for a student loan</a>

<h2 id="compare-parent-loans" class="wp-block-heading"><strong>How to Compare College Loans for Parents</strong></h2>
Both federal and private lenders offer parent loans. While similar in that parents can borrow both loan types on behalf of their child, they differ in several ways.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Student loan eligibility: Federal and Private loans</a>

<h3 class="wp-block-heading"><strong>Federal Parent PLUS Loan</strong></h3>
The only federal student loan parents can borrow on behalf of their child is the Parent PLUS Loan. To <a href="https://studentaid.gov/understand-aid/types/loans/plus/parent">receive a Parent PLUS Loan</a>, you must:
<ul>
 	<li>Be the biological or adoptive parent of a dependent undergraduate student who is enrolled at least half-time at an eligible school</li>
 	<li>Not have an adverse credit history</li>
 	<li>Meet the general requirements to receive federal student aid</li>
</ul>
The interest rate for Parent PLUS Loans is fixed and set by the government each year. For Parent PLUS Loans disbursed on or after July 1, 2022 and before July 1, 2023, the interest rate is <a href="https://studentaid.gov/understand-aid/types/loans/plus/parent">7.54%</a>.

Like other federal student loans, Parent PLUS Loans have the opportunity to be forgiven, which is <em>not </em>available for private student loans. This is an important factor to consider if you plan to pursue any <a href="https://www.sparrowfi.com/blog/parent-plus-loan-forgiveness-everything-you-need-to-know">loan forgiveness programs</a>.

<strong>&gt;&gt; MORE:</strong> <a href="https://www.sparrowfi.com/blog/parent-plus-loan-forgiveness-everything-you-need-to-know">Parent PLUS loan forgiveness: Everything you need to know</a>

Before borrowing a Parent PLUS Loan, you should <a href="https://www.sparrowfi.com/sign-up">check to see what rates you qualify for</a> in private parent loans. You may find that some private lenders are able to offer you rates lower than the Parent PLUS Loan interest rate.

<h3 class="wp-block-heading"><strong>Private Parent Loans</strong></h3>
Private parent loans are provided by private student loan lenders. Unlike federal Parent PLUS Loans, each individual private lender will offer different interest rates and terms. The eligibility criteria for private parent loans will vary, but in general, you must:
<ul>
 	<li>Meet income and/or credit requirements</li>
 	<li>Be borrowing on behalf of a student attending an eligible school</li>
</ul>
While it is commonly assumed that private student loans <em>always </em>have higher interest rates than federal student loans, that isn’t necessarily true. You should always compare both federal and private parent loan options before agreeing to one or the other.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Federal vs Private student loans: Comparison</a>

<h2><strong>Commonly Asked Questions About College Loans for Parents</strong></h2>

<h3 class="wp-block-heading"><strong>What is the best way for parents to pay for college?</strong></h3>
There is no single best way for parents to pay for their child’s college education. Generally speaking, however, you should begin by encouraging your child to pursue <a href="https://www.sparrowfi.com/blog/top-6-college-scholarship-sites">scholarship</a> and grant opportunities. Both forms of aid do <em>not </em>need to be repaid.

Following that, consider what you’re able to <a href="https://www.sparrowfi.com/blog/the-best-ways-to-start-saving-for-college">contribute out-of-pocket</a>. It’s important to minimize the amount you need to borrow.

After you’ve exhausted both options, consider both federal and private student loans.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">What are the different types of financial aid</a>

Compare 2023's Best College Loans for parents. Low Interest Rates and personalized to the needs of you and your child. Search now.

Best Parent Loans for College of December 2024

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Grace Lemire

<p>An important factor when shopping for student loans is looking at the interest rate. But interest rates can be a little confusing. You may ask yourself questions like:</p>
<ul>
<li>What is a good interest rate?</li>
<li>How do they vary?</li>
<li>What should I even look for?</li>
</ul>
<p>Before you panic, don’t worry. We’ve got your back. To give you an idea of what to look for in interest rates, let’s go over the average student loan interest rates.</p>


<h2 id="h-average-student-loan-interest-rate" class="wp-block-heading"><strong>Average Student Loan Interest Rate </strong></h2>
<p>Interest rates influence the total repayment costs you’ll have. So, to help you make a better-informed decision, it’s a good idea, then, to learn what <a href="https://www.sparrowfi.com/blog/how-student-loan-interest-actually-works">interest rates</a> are now. The interest rates will vary depending on a variety of factors. This includes what type of loan you get, your lender, and sometimes even your credit score.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="http://sparrowfi.com">Compare interest rates across top student lenders</a></p>
<p>For example, let’s take a look at the different federal student loan interest rates. These all vary depending on the type of loan and student. According to the <a href="https://studentaid.gov/understand-aid/types/loans/interest-rates">federal student aid website</a>, the current federal student loan interest rates are as follows:</p>
<ol>
<li><a href="https://www.sparrowfi.com/blog/the-difference-between-subsidized-and-unsubsidized-loans">Direct Subsidized Loans and Direct Unsubsidized Loans</a> for Undergraduates &#8211; 5.50%</li>
<li>Direct Unsubsidized Loans for Graduate or Professional Students &#8211; 7.05%</li>
<li><a href="https://www.sparrowfi.com/blog/what-are-plus-loans">Direct PLUS Loans</a> for Parents or Graduate/Professional Students &#8211; 8.08%</li>
</ol>
<p>Interest Rates for Direct Loans First Disbursed on or After July 1, 2023, and Before July 1, 2024. If your loan was disbursed before July 1, 2023, you likely have a different interest rate.</p>
<p></p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/what-are-direct-consolidation-loans">What are direct consolidation loans?</a></p>
<p>Meanwhile, the average private student loan interest rate ranges from 6% to 7% according to <a href="https://educationdata.org/average-student-loan-interest-rate">Education Data</a>. The exact interest rate you might get depends on your lender and financial situation. The overall average student loan interest rate, though, is 6.87%. This number includes data from both private and federal loans.</p>

<h2 id="h-student-loan-interest-rates-on-sparrow" class="wp-block-heading"><strong>Student Loan Interest Rates on Sparrow </strong></h2>
<p>When shopping around for student loans, you want to look for the best interest rates. <a href="http://sparrowfi.com">Sparrow</a> partners with private lenders to get you those best rates. Here’s a quick overview of what interest rates you can find on <a href="http://sparrowfi.com">Sparrow</a>.</p>


<h2 id="h-what-is-a-good-student-loan-interest-rate" class="wp-block-heading"><strong>What is a Good Student Loan Interest Rate? </strong></h2>
<p>Keeping in mind that you’ll repay not only the loan principal but the interest also, a good student loan interest rate is going to be low. In general, the lower, the better. This is because the interest rate is an indicator of how much interest you’ll pay. The higher the interest rate, the more you can expect to pay during repayment. For example, let’s say you took out a $30,000 loan on a 15-year repayment term. Using that information, let’s create two scenarios with different interest rates.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/which-is-better-variable-vs-fixed-interest-rate-student-loans">Which is better: variable or fixed interest rate?</a></p>
<p>In the first scenario, you’ll have an interest rate of 7%. With this interest rate, you’ll pay $48,537 over the course of your repayment period.</p>
<p>In scenario two, you’ll have an interest rate of 5.8%. With this interest rate, you’ll pay $44,987 throughout your repayment period.</p>
<p>Here’s a table to help you understand the information easier:</p>


<p>Notice how even just a 1.2% difference in interest rates results in saving thousands of dollars. That’s why the best interest rates are the lowest rates you can get along with good repayment terms. Doing this will help you save a lot of money in the long run.</p>


<h2 id="h-final-thoughts-from-the-nest" class="wp-block-heading"><strong>Final Thoughts from the Nest </strong></h2>
<p>Interest rates can be a little tricky. They vary a lot depending on the <a href="https://www.sparrowfi.com/blog/types-of-student-loans-which-one-is-right-for-me">type of loan</a> you have (or are looking for). The most important thing to keep in mind is to try to get as low an interest rate as you can with good loan terms.</p>
<p>As you saw earlier, Sparrow offers great interest rates from our partnering lenders. All you have to do to take advantage of these rates is fill out the <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>. Once you do, it will match you with what you are pre-qualified for from any of our 15+ partner lenders. So, get started now to <a href="https://www.sparrowfi.com/student-loan-info">find great private loan</a>s that best match what you need.</p>


<p><em data-rich-text-format-boundary="true"><a href="http://sparrowfi.com/">Sparrow</a> aims to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em></p>
<p><i data-stringify-type="italic">The loan options shared are in no particular order. Rates listed may reflect the lender’s autopay discount. Interest rates are subject to change.</i></p>


An important factor when shopping for student loans is looking at the interest rate. But interest rates can be a little confusing. You may ask yourself questions like:
<ul>
 	<li>What is a good interest rate?</li>
 	<li>How do they vary?</li>
 	<li>What should I even look for?</li>
</ul>
Before you panic, don’t worry. We’ve got your back. To give you an idea of what to look for in interest rates, let’s go over the average student loan interest rates.

<em data-rich-text-format-boundary="true"><a href="http://sparrowfi.com/">Sparrow</a> aims to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em>

<i data-stringify-type="italic">The loan options shared are in no particular order. Rates listed may reflect the lender’s autopay discount. Interest rates are subject to change.</i>

<h2 id="h-average-student-loan-interest-rate" class="wp-block-heading"><strong>Average Student Loan Interest Rate </strong></h2>
Interest rates influence the total repayment costs you’ll have. So, to help you make a better-informed decision, it’s a good idea, then, to learn what <a href="https://www.sparrowfi.com/blog/how-student-loan-interest-actually-works">interest rates</a> are now. The interest rates will vary depending on a variety of factors. This includes what type of loan you get, your lender, and sometimes even your credit score.

<strong>&gt;&gt; MORE: </strong><a href="http://sparrowfi.com">Compare interest rates across top student lenders</a>

For example, let’s take a look at the different federal student loan interest rates. These all vary depending on the type of loan and student. According to the <a href="https://studentaid.gov/understand-aid/types/loans/interest-rates">federal student aid website</a>, the current federal student loan interest rates are as follows:
<ol>
 	<li><a href="https://www.sparrowfi.com/blog/the-difference-between-subsidized-and-unsubsidized-loans">Direct Subsidized Loans and Direct Unsubsidized Loans</a> for Undergraduates - 5.50%</li>
 	<li>Direct Unsubsidized Loans for Graduate or Professional Students - 7.05%</li>
 	<li><a href="https://www.sparrowfi.com/blog/what-are-plus-loans">Direct PLUS Loans</a> for Parents or Graduate/Professional Students - 8.08%</li>
</ol>
Interest Rates for Direct Loans First Disbursed on or After July 1, 2023, and Before July 1, 2024. If your loan was disbursed before July 1, 2023, you likely have a different interest rate.



<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/what-are-direct-consolidation-loans">What are direct consolidation loans?</a>

Meanwhile, the average private student loan interest rate ranges from 6% to 7% according to <a href="https://educationdata.org/average-student-loan-interest-rate">Education Data</a>. The exact interest rate you might get depends on your lender and financial situation. The overall average student loan interest rate, though, is 6.87%. This number includes data from both private and federal loans.

<h2 id="h-student-loan-interest-rates-on-sparrow" class="wp-block-heading"><strong>Student Loan Interest Rates on Sparrow </strong></h2>
When shopping around for student loans, you want to look for the best interest rates. <a href="http://sparrowfi.com">Sparrow</a> partners with private lenders to get you those best rates. Here’s a quick overview of what interest rates you can find on <a href="http://sparrowfi.com">Sparrow</a>.

<h2 id="h-what-is-a-good-student-loan-interest-rate" class="wp-block-heading"><strong>What is a Good Student Loan Interest Rate? </strong></h2>
Keeping in mind that you’ll repay not only the loan principal but the interest also, a good student loan interest rate is going to be low. In general, the lower, the better. This is because the interest rate is an indicator of how much interest you’ll pay. The higher the interest rate, the more you can expect to pay during repayment. For example, let’s say you took out a $30,000 loan on a 15-year repayment term. Using that information, let’s create two scenarios with different interest rates.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/which-is-better-variable-vs-fixed-interest-rate-student-loans">Which is better: variable or fixed interest rate?</a>

In the first scenario, you’ll have an interest rate of 7%. With this interest rate, you’ll pay $48,537 over the course of your repayment period.

In scenario two, you’ll have an interest rate of 5.8%. With this interest rate, you’ll pay $44,987 throughout your repayment period.

Here’s a table to help you understand the information easier:

Notice how even just a 1.2% difference in interest rates results in saving thousands of dollars. That’s why the best interest rates are the lowest rates you can get along with good repayment terms. Doing this will help you save a lot of money in the long run.

<h2 id="h-final-thoughts-from-the-nest" class="wp-block-heading"><strong>Final Thoughts from the Nest </strong></h2>
Interest rates can be a little tricky. They vary a lot depending on the <a href="https://www.sparrowfi.com/blog/types-of-student-loans-which-one-is-right-for-me">type of loan</a> you have (or are looking for). The most important thing to keep in mind is to try to get as low an interest rate as you can with good loan terms.

As you saw earlier, Sparrow offers great interest rates from our partnering lenders. All you have to do to take advantage of these rates is fill out the <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>. Once you do, it will match you with what you are pre-qualified for from any of our 15+ partner lenders. So, get started now to <a href="https://www.sparrowfi.com/student-loan-info">find great private loan</a>s that best match what you need.

The average private student loan interest rate ranges from 6% to 7%. Compare interest rates across student lenders:

Average Student Loan Interest Rate in December 2024

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Jocelyn Segoviano

Financial Wellness

Financial Wellness Archives - Sparrow Nest

<p class="has-text-align-left"><em>&#8220;Can I get a student loan even though I have bad credit?&#8221;</em></p>
<p>The simple answer: yes. The more complicated answer: welllll, yes, but it’s going to be trickier.</p>
<p>While most federal student loans don’t require you to have a good credit score, or any credit at all, most <a href="https://www.sparrowfi.com/">private student loans</a>, on the other hand, do. If you’re worried about your poor credit score preventing you from being able to pay for college, don’t fret. While it may be more difficult, it isn’t entirely impossible.</p>
<p>Here’s what you can do to get a student loan with bad credit.</p>
<p>&gt;&gt; <strong>MORE:</strong> <a href="https://www.sparrowfi.com/undergrad-student-loan">Compare student loan rates from 17+ lenders</a></p>


<h2 class="wp-block-heading"><strong>What is Considered Bad Credit?</strong></h2>
<p>Generally speaking, you will need a credit score of at least 670 or higher to qualify with most private lenders. That said, what each individual lender considers “bad” credit will vary. And, there are several lenders that work with borrowers with lower credit scores.</p>
<p>It&#8217;s important to note that most private lenders use the FICO credit scoring model. The FICO scale uses a range of 300-850 to measure creditworthiness, so the closer you are to 850 the better.</p>
<p><strong>&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">What credit score is needed for a student loan?</a></p>
<p><img loading="lazy" decoding="async" class="" src="https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1024x576.png" alt="This image has an empty alt attribute; its file name is Blog-Imagery-1024x576.png" width="768" height="432" /></p>


<h3 class="wp-block-heading"><strong>Can You Get a Student Loan with Bad Credit</strong>?</h3>
<p>Yes. Regardless of which student loan type you choose, whether federal or private, there are options for borrowers with bad credit.</p>
<p><strong>&gt;&gt; MORE:</strong> <a href="https://www.sparrowfi.com/blog/how-to-remove-student-loans-from-your-credit-report">How to remove student loans from your credit report</a></p>


<h2 id="h-best-private-student-loans-for-bad-credit" class="wp-block-heading"><strong>Best Private Student Loans for Bad Credit</strong></h2>
<p>First, here&#8217;s is a list of the top 5 student loans for bad credit. Rather than searching for lenders one-by-one, we recommend starting the process with an automated <a href="https://www.sparrowfi.com/">student loan search tool</a>. After you complete the free <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>, we’ll show you the rates and terms you’d qualify for with 17+ premier lenders.</p>


<h3><strong><a href="https://asla.accountcenter.studentloan.org/inschool/welcome?ref=arspar&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=spar-is&amp;qfid=affiliate-000-000">Arkansas Student Loan Authority</a></strong></h3>
<p>The Arkansas Student Loan Authority (ASLA) is an Arkansas state entity that provides educational funding for all Arkansas students who wish to attend higher education institutions. ASLA has a minimum credit score requirement of 670. ASLA is a great option for Arkansas students.</p>


<h3><strong><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000">Ascent</a> </strong></h3>
<p><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000">Ascent</a> is an online lender that offers educational funding for students. They offer three types of student loans: a traditional cosigned loan, a non-cosigned credit-based loan, and a non-cosigned outcomes-based loan. Collectively, the three options provide a great selection for those who do not have a cosigner available, are international or DACA students, or have lower credit scores. Ascent’s minimum credit requirement varies based on the loan.</p>


<h3><strong><a href="https://studentloans.com/?mc=0000009i">Brazos</a></strong></h3>
<p>Brazos is a non-profit lender offering educational funding through private student loans available only to Texas Residents. They offer a wide range of loan options, covering undergraduate, graduate, MBA, law, medical, dental, veterinary, and doctoral degree programs. Brazos does not disclose their minimum credit requirement. Brazos is a great option if you live in Texas and want competitive interest rates.</p>


<h3><strong><a href="https://www.collegeavestudentloans.com/application/?SC=CAIS01&amp;ACT=US&amp;utm_campaign=affiliate%20ongoing&amp;utm_source=sparrow&amp;utm_medium=aggregator&amp;utm_content=apply&amp;brand=college%20ave&amp;product=inschool&amp;p_aff=sparrow&amp;goal=acquisition&amp;agg_ref_id=affiliate-000-000">College Ave Student Loans</a></strong></h3>
<p>College Ave Student Loans offers educational funding for undergraduate, graduate, professional, and career school students, and parents of students. To qualify for a student loan with College Ave, you will need a credit score in the mid-600s. College Ave is a great option if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget.</p>


<h3><strong><a href="https://www.earnest.com/student-loans?utm_source=sparrow&amp;utm_medium=referral&amp;utm_content=affiliate-000-000&amp;redirect_event=true&amp;b=sparrowslo1365">Earnest</a></strong></h3>
<p><a href="https://www.earnest.com/student-loans?utm_source=sparrow&amp;utm_medium=referral&amp;utm_content=affiliate-000-000&amp;redirect_event=true&amp;b=sparrowslo1365">Earnest’s student loans</a> provide funding to undergraduate, graduate, and professional students. Earnest has a minimum credit score requirement of 650. They’re a great option if you are seeking competitive interest rates, unique borrower perks, and flexible repayment options that allow you to find a loan that matches your budget.</p>


<h3><strong><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000">Edly</a></strong></h3>
<p><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000">Edly Income-Based Repayment (IBR) Student Loans</a>, originated by Edly’s partner FinWise Bank, provide an alternative loan option for students. Students who are approved for an Edly student loan will not have to make payments while in school. Instead, borrowers make payments after graduation based on their income. Due to the structure of IBR loans, borrowers have a variety of benefits when it comes to repayment. An Edly IBR loan is best if you are seeking a loan option with no cosigner, competitive repayment terms, and flexible repayment options.</p>


<h3><strong><a href="https://www.funding-u.com/no-cosigner-student-loans">Funding U</a></strong></h3>
<p><a href="https://www.funding-u.com/no-cosigner-student-loans">Funding U</a> is an online lender that focuses exclusively on undergraduate students with no cosigner. Rather than looking at your credit score or income, Funding U looks at non-traditional metrics such as your school, major, GPA and estimated future earnings to assess your creditworthiness. Funding U’s student loan is best if you are a high-achieving undergraduate student with limited credit history and no access to a creditworthy cosigner.</p>


<h3><strong><a href="https://www.lendkey.com/partner-psl/?clickid=VQgziE01AxyPWbPUtF1bfymMUkFxkz01uyj13s0&amp;irgwc=1&amp;sk=AFF-Sparrow">LendKey</a></strong></h3>
<p><a href="abouthttps://www.lendkey.com/partner-psl/?clickid=VQgziE01AxyPWbPUtF1bfymMUkFxkz01uyj13s0&amp;irgwc=1&amp;sk=AFF-Sparrow">LendKey</a> is an institution that offers educational funding to undergraduate and graduate students. By connecting borrowers with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. LendKey has a minimum credit requirement of 660. It’s best for students who want generous cosigner release and forbearance policies.</p>


<h3><strong><a href="https://mpowerfinancing.com/get-a-loan?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000">MPOWER</a></strong></h3>
<p><a href="https://mpowerfinancing.com/get-a-loan?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000">MPOWER</a> is an online lender that offers educational funding to international, domestic, and DACA students. They offer non-cosigned undergraduate and graduate student loans. It is best for international students and DACA students who don’t have a credit history and can’t access a qualified cosigner.</p>


<h2 id="federal-loans" class="wp-block-heading"><strong>Can You Get Federal Student Loans with Bad Credit?</strong></h2>
<p>Most <a href="https://wordpress.sparrowfi.com/category/federal-student-loans/">federal student loans</a> don’t require you to have a good credit score (or any credit at all). They also tend to have lower interest rates and better terms and conditions. These qualities make them a great place to start when thinking about financing your college education.</p>
<p>There are four main types of federal student loans, three of which do not require a credit check or a high credit score to qualify.</p>


<h3 class="wp-block-heading"><strong>Federal Loans that Don’t Require a Credit Check</strong></h3>
<h4 class="wp-block-heading"><strong>Direct Subsidized Loans</strong></h4>
<p>Direct Subsidized Loans are available only to undergraduate students who demonstrate financial need. This means that you may not qualify for Direct Subsidized Loans.</p>
<p>If you do, the government will pay the interest on your <a href="https://www.sparrowfi.com/blog/the-difference-between-subsidized-and-unsubsidized-loans">Direct Subsidized Loans</a> while you are in school. Once you graduate, you’ll be in charge of paying them back, interest included.</p>
<h4 class="wp-block-heading"><strong>Direct Unsubsidized Loans</strong></h4>
<p>Direct Unsubsidized Loans are available to both undergraduate and graduate students, and you do not need to prove financial need to qualify. However, while in school, the government does <em>not </em>pay interest on these loans. So, while you’re hitting the books, interest will be accumulating in the meantime.</p>
<h4 class="wp-block-heading"><strong>Direct Consolidation Loans</strong></h4>
<p>Direct Consolidation Loans allow you to combine more than one federal loan into one. So, if you have several federal loans and want to simplify your payments, you can combine them into one singular loan, and thus, one singular payment. When you <a href="https://www.sparrowfi.com/blog/how-to-consolidate-student-loans-with-bad-credit">consolidate</a>, your new interest rate is the average of your previous loans’ interest rates.</p>


<h3 class="wp-block-heading"><strong>Federal Loans That Do Require a Credit Check</strong></h3>
<h4 class="wp-block-heading"><strong>Direct PLUS Loans</strong></h4>
<p>Direct PLUS Loans are available to graduate/professional students and parents of students. Like Unsubsidized Loans, you will be responsible for any interest that accrues, even while in school. However, unlike all other federal loan types, <a href="https://www.sparrowfi.com/blog/what-are-plus-loans">Direct PLUS Loans</a> <em>do </em>require an adverse credit check.</p>
<p>While the credit check process could be a bummer if you have bad credit, there is hope if you don’t pass it. Adding a creditworthy endorser to the loan may allow you to qualify.</p>


<h3 class="wp-block-heading"><strong>How to Get Federal Loans with Bad Credit</strong></h3>
<p>In order to get federal aid, you need to fill out the Free Application for Federal Student Aid (<a href="https://www.sparrowfi.com/blog/6-simple-steps-to-fill-out-fafsa">FAFSA</a>). This form will ask you to provide information regarding you and your family’s financial situation to determine your eligibility for aid, but it will not run a credit check as part of that evaluation.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/most-common-fafsa-errors-to-avoid-when-applying">Most common FAFSA application errors to avoid</a></p>
<p>It’s important to note that you don’t have to accept all the federal aid that you qualify for. You should always consider the terms and conditions and think about what makes most sense for you and your educational journey.</p>
<p>While federal loans <em>do </em>tend to be a better choice in comparison to private student loans, they won’t <em>always </em>be best. There’s a variety of different <a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">financial aid options for students</a>, so make sure you understand what they all are and what they all mean before agreeing to one.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">What are 4 types of financial aid for college?</a></p>


<h2 id="private-loans" class="wp-block-heading"><strong>Refinancing Student Loans with Bad Credit</strong></h2>
<p>The goal of student loan refinancing is typically to score a lower interest rate or monthly payment, saving you money in the long run. If you have a bad credit score, it may be challenging to secure a lower rate than what you currently have.</p>
<p><strong>&gt;&gt; MORE:</strong> <a href="https://www.sparrowfi.com/student-loan-refi">Compare student loan refinance rates from 17+ lenders</a></p>
<p>Before refinancing, ask yourself the following questions:</p>
<ol>
<li>Has your credit score improved since you took out the loan you currently have?</li>
<li>Are you paying a high interest rate on your current loan? Do you believe you could secure a lower interest rate based on the market?</li>
</ol>
<p>If you answered yes to either of these questions, then refinancing may be a good option for you.</p>
<p>&gt;&gt; <strong>MORE: </strong><a href="https://www.sparrowfi.com/blog/should-i-refinance-my-student-loans">Should I refinance my student loans</a></p>


Compare rates from up to 17 lenders in as little as 2 minutes

Easily refinance your student loans

<h2 class="wp-block-heading"><strong>Best Refinance Loans for Bad Credit</strong></h2>
<p>Here is a list of the top refinance loan companies for bad credit. In just three minutes, you can compare real and personalized student loan refinancing rates from 17+ lenders &#8211; for free &#8211; by using the <a href="https://www.app.sparrowfi.com/login/type">Sparrow form</a>.</p>


<h3><strong><a href="https://asla.accountcenter.studentloan.org/refinance/default/welcome?ref=arspar&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=spar-refi&amp;qfid=affiliate-000-000">Arkansas Student Loan Authority</a></strong></h3>
<p><a href="https://asla.accountcenter.studentloan.org/refinance/default/welcome?ref=arspar&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=spar-refi&amp;qfid=affiliate-000-000">The Arkansas Student Loan Authority (ASLA)</a> is an Arkansas state entity that provides student loan refinancing for Arkansas residents. ASLA has a minimum credit score requirement of 670.</p>


<h3><strong><a href="https://www.collegeavestudentloans.com/application/?SC=CARF01&amp;ACT=US&amp;utm_campaign=affiliate%20ongoing&amp;utm_source=sparrow&amp;utm_medium=aggregator&amp;utm_content=apply&amp;brand=college%20ave&amp;product=refi&amp;p_aff=sparrow&amp;goal=acquisition&amp;agg_ref_id=affiliate-000-000">College Ave Student Loans</a></strong></h3>
<p><a href="https://www.collegeavestudentloans.com/application/?SC=CARF01&amp;ACT=US&amp;utm_campaign=affiliate%20ongoing&amp;utm_source=sparrow&amp;utm_medium=aggregator&amp;utm_content=apply&amp;brand=college%20ave&amp;product=refi&amp;p_aff=sparrow&amp;goal=acquisition&amp;agg_ref_id=affiliate-000-000">College Ave</a> offers student loan refinancing with competitive rates, flexible repayment terms, and strong customer service. Their student loan refinance offering is best if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget. To qualify for a refinance loan with College Ave, you will need a credit score in the mid-600s.</p>


<h3><strong><a href="https://www.iowastudentloan.org/refinance-loan/student-loan.aspx?ref=SPAR&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=reset&amp;campaign=sparrow">ISL Education Lending</a></strong></h3>
<p><a href="https://www.iowastudentloan.org/refinance-loan/student-loan.aspx?ref=SPAR&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=reset&amp;campaign=sparrow">ISL</a> is a nonprofit lender that offers both private student loans and student loan refinancing. ISL’s student loan refinancing is best if you haven’t graduated and want generous forbearance policies. ISL has a minimum credit score of 670.</p>


<h3><strong><a href="https://www.sofi.com/signup/landing-register/isl?clickId=2dNXuI0-ixyPTzwWKR1aoR6KUkF2Wg1E6ykZRU0&amp;irgwc=1&amp;adId=846867&amp;adName=SoFi%20Private%20Student%20Loan&amp;partnerId=2776865&amp;partnerName=Sparrow&amp;adTarget=inschool&amp;partnerType=Affiliate&amp;adDepartment=BD&amp;sharedId=&amp;ami=&amp;programId=11190&amp;experiment=isl-merge-page-v5&amp;variant=control&amp;utm_source=impact&amp;utm_medium=affiliates&amp;utm_campaign=SoFi%20Private%20Student%20Loan">SoFi</a></strong></h3>
<p><a href="https://www.sofi.com/signup/landing-register/isl?clickId=2dNXuI0-ixyPTzwWKR1aoR6KUkF2Wg1E6ykZRU0&amp;irgwc=1&amp;adId=846867&amp;adName=SoFi%20Private%20Student%20Loan&amp;partnerId=2776865&amp;partnerName=Sparrow&amp;adTarget=inschool&amp;partnerType=Affiliate&amp;adDepartment=BD&amp;sharedId=&amp;ami=&amp;programId=11190&amp;experiment=isl-merge-page-v5&amp;variant=control&amp;utm_source=impact&amp;utm_medium=affiliates&amp;utm_campaign=SoFi%20Private%20Student%20Loan">SoFi</a> is one of the largest student loan refinance companies in the industry. With competitive interest rates, a diverse set of repayment options, and exclusive member benefits, SoFi is a good fit for borrowers with an associate’s degree or higher or borrowers with a high income. SoFi has a minimum credit score of 650.</p>


<h2 id="what-to-do-if-denied" class="wp-block-heading"><strong>What to Do if You Were Denied a Student Loan Due to Bad Credit</strong></h2>
<p>If you were initially denied a private student loan due to poor credit, your best bet is to look for a <a href="https://www.sparrowfi.com/blog/what-is-a-private-student-loan-cosigner">creditworthy cosigner</a>. A cosigner is someone who agrees to sign onto the loan. In doing so, they agree that if the borrower fails to repay the loan, the cosigner will take responsibility for paying it back.</p>
<p>&gt;&gt; <strong>MORE: </strong><a href="https://www.sparrowfi.com/blog/what-is-a-private-student-loan-cosigner">What is a private student loan cosigner?</a></p>
<p>Having a cosigner is valuable because their credit score will be factored into the lender’s decision to work with you, which can also help you secure a better interest rate and terms. So, if your credit score isn’t up to par but theirs is, you may be in luck.</p>
<p>Make sure you don’t pick just anyone to cosign unless you really, <em>really</em> have to. Make sure to find someone that is creditworthy and has a history of managing their finances effectively. Additionally, always make sure to have open conversations with whoever you choose before they agree to cosign. Explain the pros and cons of being a cosigner and what impact it could have for them. Discussing expectations around repaying the loan is also important so your cosigner knows what to expect.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/can-you-get-an-international-student-loan-without-a-cosigner">Can you get an international student loan without a cosigner?</a></p>


<h2 id="credit-tips" class="wp-block-heading"><strong>Tips for Improving Your Credit</strong></h2>
<p>Improving your credit score won’t happen overnight, but it is worthwhile to take any steps you can throughout the loan process to boost your credit.</p>
<p>Here’s a few tips to help get your credit score in check.</p>


<h3 class="wp-block-heading"><strong>Stay Aware of How Much Debt You’re Taking On</strong></h3>
<p>Your credit score is calculated based on a variety of factors, one being your payment history. In fact, your payment history is the most important part of your credit score, making up 35% of the calculation.</p>
<p></p>
<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" class="wp-image-2224" src="https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1-1024x576.png" alt="" width="768" height="432" srcset="https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1-1024x576.png 1024w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1-300x169.png 300w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1-768x432.png 768w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1-1536x864.png 1536w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1-2048x1152.png 2048w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1-1568x882.png 1568w" sizes="auto, (max-width: 768px) 100vw, 768px" /></figure>
<p></p>
<p>When you take on debt, such as student loans, you are doing so with the understanding that that money will be paid back and paid on time. If you make consistent, on-time payments, it’s good for your credit, as it demonstrates an ability to pay back debts successfully. If you pay late or miss payments, it could hurt your credit, as it demonstrates an inability to pay back debts successfully.</p>
<p>&gt;&gt; <strong>MORE</strong>: <a href="https://www.sparrowfi.com/blog/the-most-effective-debt-payoff-strategy-you-need-to-know">Most effective debt-payoff strategy</a></p>

<p>While this may sound like a no-brainer, you’ll want to be aware of how much debt you’re taking on. If you take on too much, it could make you more likely to miss a payment or go into loan default.</p>
<p>Remember to be realistic about how much you will be able to afford in monthly payments. Utilizing a <a href="https://smartasset.com/student-loans/student-loan-calculator#quE69fe79Y">student loan calculator</a> to estimate your monthly loan payments after graduation is a great way to get real about whether the loan will be feasible when repayment starts. Let’s use an example here.</p>
<p>Let’s say you’re studying to be a public school teacher, and you land a job making $50,000 a year after graduation. This would land you around $4,200 per month (if we round up) to budget with. <em>(For the ease of this example, we aren’t factoring in taxes.)</em></p>
<p>Now, let’s say your monthly expenses are as follows:</p>
<ul>
<li>Rent: $1,300</li>
<li>Utilities: $200</li>
<li>Gas: $200</li>
<li>Health Insurance: $100</li>
<li>Dining Out: $200</li>
<li>Groceries: $250</li>
</ul>
<p>You’re left with $1,950 each month. This example is simple and doesn’t factor in taxes or other expenses such as savings, car maintenance, pet costs, entertainment, and more.</p>
<p>If you’re debating a $30,000 student loan at a 9% interest rate and a 15-year repayment term, you’d be looking at a $304 minimum monthly payment. Now remember, this is for <em>one </em>loan. If you took out four of these loans, one for each year you’re in school, you’re looking at an even heftier monthly payment.</p>
<p>So, before taking out a student loan, consider whether the estimated monthly payments would be affordable for you given your future income potential. Being realistic about what you may be able to afford could prevent you from missing a payment down the line.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">What credit score is needed for a student loan?</a></p>


<h3 class="wp-block-heading"><strong>Keep Open Lines of Credit You Already Have</strong></h3>
<p>The length of your credit history is another important factor in determining your credit score. The longer you have had open lines of credit, the better your credit score will typically be. Having, and properly managing, your credit for a long time shows lenders that you’re responsible.</p>
<p>While it may sound counterintuitive, closing any open lines of credit you currently have could hurt your credit score because it shortens the length of your credit history. Unless you absolutely need to, stay away from closing any current accounts.</p>


<h3 class="wp-block-heading"><strong>Don’t Open New Lines of Credit</strong></h3>
<p>Opening new lines of credit will cause what’s called a hard inquiry. A hard inquiry occurs when a financial institution checks your credit report before making a lending decision. When lenders do a hard inquiry, they’re attempting to assess how you’ve handled your credit in the past.</p>
<p>Just like you’d only lend money to someone you trust, lenders want to make sure you’re a sound investment for them before dishing out the cash. A <a href="https://www.sparrowfi.com/blog/whats-a-soft-credit-inquiry-whats-a-hard-credit-inquiry">hard inquiry</a>, though, can temporarily hurt your credit. So, if you’re looking to take out a student loan anytime soon, we recommend holding off on opening any new lines of credit.</p>


<h3 class="wp-block-heading"><strong>Check Your Credit Report</strong></h3>
<p>If you have bad credit but aren’t totally sure why, you may want to check your credit report. Your credit report is important to look over for many reasons, but especially to check for errors, fraud, or identity theft. Even a small error on your credit report can significantly hurt your credit score, so we recommend checking fairly often.</p>
<p>There are many financial institutions, such as banks and credit card companies, that offer free credit reports. If yours don’t, utilize the free <a href="https://www.annualcreditreport.com/index.action">Annual Credit Report</a> website. You are, by law, entitled to these reports yearly.</p>


<h2 class="wp-block-heading"><strong>Final Thoughts from the Nest</strong></h2>
<p>So, yes. You can get a student loan with bad credit. However, it might make the process a bit more challenging. Start thinking ahead about where your credit is at, and if it’s not ideal, start taking small steps to build it. To <a href="https://www.sparrowfi.com/">find a private student loan</a> for students with bad/no credit, complete the <a href="https://www.app.sparrowfi.com/login/type">Sparrow form</a> today.</p>
<p> </p>
<div class="wp-block-spacer" aria-hidden="true"></div>
<p> </p>
<p><em>Sparrow&#8217;s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em></p>

<p class="has-text-align-left"><em>"Can I get a student loan even though I have bad credit?"</em></p>
The simple answer: yes. The more complicated answer: welllll, yes, but it’s going to be trickier.

While most federal student loans don’t require you to have a good credit score, or any credit at all, most <a href="https://www.sparrowfi.com/">private student loans</a>, on the other hand, do. If you’re worried about your poor credit score preventing you from being able to pay for college, don’t fret. While it may be more difficult, it isn’t entirely impossible.

Here’s what you can do to get a student loan with bad credit.

&gt;&gt; <strong>MORE:</strong> <a href="https://www.sparrowfi.com/undergrad-student-loan">Compare student loan rates from 17+ lenders</a>

<h3><strong><a href="https://www.collegeavestudentloans.com/application/?SC=CAIS01&amp;ACT=US&amp;utm_campaign=affiliate%20ongoing&amp;utm_source=sparrow&amp;utm_medium=aggregator&amp;utm_content=apply&amp;brand=college%20ave&amp;product=inschool&amp;p_aff=sparrow&amp;goal=acquisition&amp;agg_ref_id=affiliate-000-000">College Ave Student Loans</a></strong></h3>
College Ave Student Loans offers educational funding for undergraduate, graduate, professional, and career school students, and parents of students. To qualify for a student loan with College Ave, you will need a credit score in the mid-600s. College Ave is a great option if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget.

<h3><strong><a href="https://www.earnest.com/student-loans?utm_source=sparrow&amp;utm_medium=referral&amp;utm_content=affiliate-000-000&amp;redirect_event=true&amp;b=sparrowslo1365">Earnest</a></strong></h3>
<a href="https://www.earnest.com/student-loans?utm_source=sparrow&amp;utm_medium=referral&amp;utm_content=affiliate-000-000&amp;redirect_event=true&amp;b=sparrowslo1365">Earnest’s student loans</a> provide funding to undergraduate, graduate, and professional students. Earnest has a minimum credit score requirement of 650. They’re a great option if you are seeking competitive interest rates, unique borrower perks, and flexible repayment options that allow you to find a loan that matches your budget.

<h3><strong><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000">Edly</a></strong></h3>
<a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000">Edly Income-Based Repayment (IBR) Student Loans</a>, originated by Edly’s partner FinWise Bank, provide an alternative loan option for students. Students who are approved for an Edly student loan will not have to make payments while in school. Instead, borrowers make payments after graduation based on their income. Due to the structure of IBR loans, borrowers have a variety of benefits when it comes to repayment. An Edly IBR loan is best if you are seeking a loan option with no cosigner, competitive repayment terms, and flexible repayment options.

<h3><strong><a href="https://www.funding-u.com/no-cosigner-student-loans">Funding U</a></strong></h3>
<a href="https://www.funding-u.com/no-cosigner-student-loans">Funding U</a> is an online lender that focuses exclusively on undergraduate students with no cosigner. Rather than looking at your credit score or income, Funding U looks at non-traditional metrics such as your school, major, GPA and estimated future earnings to assess your creditworthiness. Funding U’s student loan is best if you are a high-achieving undergraduate student with limited credit history and no access to a creditworthy cosigner.

<h3><strong><a href="https://www.lendkey.com/partner-psl/?clickid=VQgziE01AxyPWbPUtF1bfymMUkFxkz01uyj13s0&amp;irgwc=1&amp;sk=AFF-Sparrow">LendKey</a></strong></h3>
<a href="abouthttps://www.lendkey.com/partner-psl/?clickid=VQgziE01AxyPWbPUtF1bfymMUkFxkz01uyj13s0&amp;irgwc=1&amp;sk=AFF-Sparrow">LendKey</a> is an institution that offers educational funding to undergraduate and graduate students. By connecting borrowers with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. LendKey has a minimum credit requirement of 660. It’s best for students who want generous cosigner release and forbearance policies.

<h3><strong><a href="https://mpowerfinancing.com/get-a-loan?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000">MPOWER</a></strong></h3>
<a href="https://mpowerfinancing.com/get-a-loan?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000">MPOWER</a> is an online lender that offers educational funding to international, domestic, and DACA students. They offer non-cosigned undergraduate and graduate student loans. It is best for international students and DACA students who don’t have a credit history and can’t access a qualified cosigner.

<h2 id="federal-loans" class="wp-block-heading"><strong>Can You Get Federal Student Loans with Bad Credit?</strong></h2>
Most <a href="https://wordpress.sparrowfi.com/category/federal-student-loans/">federal student loans</a> don’t require you to have a good credit score (or any credit at all). They also tend to have lower interest rates and better terms and conditions. These qualities make them a great place to start when thinking about financing your college education.

There are four main types of federal student loans, three of which do not require a credit check or a high credit score to qualify.

<h3 class="wp-block-heading"><strong>Federal Loans that Don’t Require a Credit Check</strong></h3>
<h4 class="wp-block-heading"><strong>Direct Subsidized Loans</strong></h4>
Direct Subsidized Loans are available only to undergraduate students who demonstrate financial need. This means that you may not qualify for Direct Subsidized Loans.

If you do, the government will pay the interest on your <a href="https://www.sparrowfi.com/blog/the-difference-between-subsidized-and-unsubsidized-loans">Direct Subsidized Loans</a> while you are in school. Once you graduate, you’ll be in charge of paying them back, interest included.
<h4 class="wp-block-heading"><strong>Direct Unsubsidized Loans</strong></h4>
Direct Unsubsidized Loans are available to both undergraduate and graduate students, and you do not need to prove financial need to qualify. However, while in school, the government does <em>not </em>pay interest on these loans. So, while you’re hitting the books, interest will be accumulating in the meantime.
<h4 class="wp-block-heading"><strong>Direct Consolidation Loans</strong></h4>
Direct Consolidation Loans allow you to combine more than one federal loan into one. So, if you have several federal loans and want to simplify your payments, you can combine them into one singular loan, and thus, one singular payment. When you <a href="https://www.sparrowfi.com/blog/how-to-consolidate-student-loans-with-bad-credit">consolidate</a>, your new interest rate is the average of your previous loans’ interest rates.

<h3 class="wp-block-heading"><strong>Federal Loans That Do Require a Credit Check</strong></h3>
<h4 class="wp-block-heading"><strong>Direct PLUS Loans</strong></h4>
Direct PLUS Loans are available to graduate/professional students and parents of students. Like Unsubsidized Loans, you will be responsible for any interest that accrues, even while in school. However, unlike all other federal loan types, <a href="https://www.sparrowfi.com/blog/what-are-plus-loans">Direct PLUS Loans</a> <em>do </em>require an adverse credit check.

While the credit check process could be a bummer if you have bad credit, there is hope if you don’t pass it. Adding a creditworthy endorser to the loan may allow you to qualify.

<h3 class="wp-block-heading"><strong>How to Get Federal Loans with Bad Credit</strong></h3>
In order to get federal aid, you need to fill out the Free Application for Federal Student Aid (<a href="https://www.sparrowfi.com/blog/6-simple-steps-to-fill-out-fafsa">FAFSA</a>). This form will ask you to provide information regarding you and your family’s financial situation to determine your eligibility for aid, but it will not run a credit check as part of that evaluation.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/most-common-fafsa-errors-to-avoid-when-applying">Most common FAFSA application errors to avoid</a>

It’s important to note that you don’t have to accept all the federal aid that you qualify for. You should always consider the terms and conditions and think about what makes most sense for you and your educational journey.

While federal loans <em>do </em>tend to be a better choice in comparison to private student loans, they won’t <em>always </em>be best. There’s a variety of different <a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">financial aid options for students</a>, so make sure you understand what they all are and what they all mean before agreeing to one.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">What are 4 types of financial aid for college?</a>

<h2 id="private-loans" class="wp-block-heading"><strong>Refinancing Student Loans with Bad Credit</strong></h2>
The goal of student loan refinancing is typically to score a lower interest rate or monthly payment, saving you money in the long run. If you have a bad credit score, it may be challenging to secure a lower rate than what you currently have.

<strong>&gt;&gt; MORE:</strong> <a href="https://www.sparrowfi.com/student-loan-refi">Compare student loan refinance rates from 17+ lenders</a>

Before refinancing, ask yourself the following questions:
<ol>
 	<li>Has your credit score improved since you took out the loan you currently have?</li>
 	<li>Are you paying a high interest rate on your current loan? Do you believe you could secure a lower interest rate based on the market?</li>
</ol>
If you answered yes to either of these questions, then refinancing may be a good option for you.

&gt;&gt; <strong>MORE: </strong><a href="https://www.sparrowfi.com/blog/should-i-refinance-my-student-loans">Should I refinance my student loans</a>

<h2 class="wp-block-heading"><strong>Best Refinance Loans for Bad Credit</strong></h2>
Here is a list of the top refinance loan companies for bad credit. In just three minutes, you can compare real and personalized student loan refinancing rates from 17+ lenders - for free - by using the <a href="https://www.app.sparrowfi.com/login/type">Sparrow form</a>.

<h2 class="wp-block-heading"><strong>What is Considered Bad Credit?</strong></h2>
Generally speaking, you will need a credit score of at least 670 or higher to qualify with most private lenders. That said, what each individual lender considers “bad” credit will vary. And, there are several lenders that work with borrowers with lower credit scores.

It's important to note that most private lenders use the FICO credit scoring model. The FICO scale uses a range of 300-850 to measure creditworthiness, so the closer you are to 850 the better.

<strong>&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">What credit score is needed for a student loan?</a>

<img class="" src="https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1024x576.png" alt="This image has an empty alt attribute; its file name is Blog-Imagery-1024x576.png" width="768" height="432" />

<h3><strong><a href="https://asla.accountcenter.studentloan.org/refinance/default/welcome?ref=arspar&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=spar-refi&amp;qfid=affiliate-000-000">Arkansas Student Loan Authority</a></strong></h3>
<a href="https://asla.accountcenter.studentloan.org/refinance/default/welcome?ref=arspar&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=spar-refi&amp;qfid=affiliate-000-000">The Arkansas Student Loan Authority (ASLA)</a> is an Arkansas state entity that provides student loan refinancing for Arkansas residents. ASLA has a minimum credit score requirement of 670.

<h3><strong><a href="https://www.collegeavestudentloans.com/application/?SC=CARF01&amp;ACT=US&amp;utm_campaign=affiliate%20ongoing&amp;utm_source=sparrow&amp;utm_medium=aggregator&amp;utm_content=apply&amp;brand=college%20ave&amp;product=refi&amp;p_aff=sparrow&amp;goal=acquisition&amp;agg_ref_id=affiliate-000-000">College Ave Student Loans</a></strong></h3>
<a href="https://www.collegeavestudentloans.com/application/?SC=CARF01&amp;ACT=US&amp;utm_campaign=affiliate%20ongoing&amp;utm_source=sparrow&amp;utm_medium=aggregator&amp;utm_content=apply&amp;brand=college%20ave&amp;product=refi&amp;p_aff=sparrow&amp;goal=acquisition&amp;agg_ref_id=affiliate-000-000">College Ave</a> offers student loan refinancing with competitive rates, flexible repayment terms, and strong customer service. Their student loan refinance offering is best if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget. To qualify for a refinance loan with College Ave, you will need a credit score in the mid-600s.

<h3><strong><a href="https://www.iowastudentloan.org/refinance-loan/student-loan.aspx?ref=SPAR&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=reset&amp;campaign=sparrow">ISL Education Lending</a></strong></h3>
<a href="https://www.iowastudentloan.org/refinance-loan/student-loan.aspx?ref=SPAR&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=reset&amp;campaign=sparrow">ISL</a> is a nonprofit lender that offers both private student loans and student loan refinancing. ISL’s student loan refinancing is best if you haven’t graduated and want generous forbearance policies. ISL has a minimum credit score of 670.

<h3 class="wp-block-heading"><strong>Can You Get a Student Loan with Bad Credit</strong>?</h3>
Yes. Regardless of which student loan type you choose, whether federal or private, there are options for borrowers with bad credit.

<strong>&gt;&gt; MORE:</strong> <a href="https://www.sparrowfi.com/blog/how-to-remove-student-loans-from-your-credit-report">How to remove student loans from your credit report</a>

<h3><strong><a href="https://www.sofi.com/signup/landing-register/isl?clickId=2dNXuI0-ixyPTzwWKR1aoR6KUkF2Wg1E6ykZRU0&amp;irgwc=1&amp;adId=846867&amp;adName=SoFi%20Private%20Student%20Loan&amp;partnerId=2776865&amp;partnerName=Sparrow&amp;adTarget=inschool&amp;partnerType=Affiliate&amp;adDepartment=BD&amp;sharedId=&amp;ami=&amp;programId=11190&amp;experiment=isl-merge-page-v5&amp;variant=control&amp;utm_source=impact&amp;utm_medium=affiliates&amp;utm_campaign=SoFi%20Private%20Student%20Loan">SoFi</a></strong></h3>
<a href="https://www.sofi.com/signup/landing-register/isl?clickId=2dNXuI0-ixyPTzwWKR1aoR6KUkF2Wg1E6ykZRU0&amp;irgwc=1&amp;adId=846867&amp;adName=SoFi%20Private%20Student%20Loan&amp;partnerId=2776865&amp;partnerName=Sparrow&amp;adTarget=inschool&amp;partnerType=Affiliate&amp;adDepartment=BD&amp;sharedId=&amp;ami=&amp;programId=11190&amp;experiment=isl-merge-page-v5&amp;variant=control&amp;utm_source=impact&amp;utm_medium=affiliates&amp;utm_campaign=SoFi%20Private%20Student%20Loan">SoFi</a> is one of the largest student loan refinance companies in the industry. With competitive interest rates, a diverse set of repayment options, and exclusive member benefits, SoFi is a good fit for borrowers with an associate’s degree or higher or borrowers with a high income. SoFi has a minimum credit score of 650.

<h2 id="what-to-do-if-denied" class="wp-block-heading"><strong>What to Do if You Were Denied a Student Loan Due to Bad Credit</strong></h2>
If you were initially denied a private student loan due to poor credit, your best bet is to look for a <a href="https://www.sparrowfi.com/blog/what-is-a-private-student-loan-cosigner">creditworthy cosigner</a>. A cosigner is someone who agrees to sign onto the loan. In doing so, they agree that if the borrower fails to repay the loan, the cosigner will take responsibility for paying it back.

&gt;&gt; <strong>MORE: </strong><a href="https://www.sparrowfi.com/blog/what-is-a-private-student-loan-cosigner">What is a private student loan cosigner?</a>

Having a cosigner is valuable because their credit score will be factored into the lender’s decision to work with you, which can also help you secure a better interest rate and terms. So, if your credit score isn’t up to par but theirs is, you may be in luck.

Make sure you don’t pick just anyone to cosign unless you really, <em>really</em> have to. Make sure to find someone that is creditworthy and has a history of managing their finances effectively. Additionally, always make sure to have open conversations with whoever you choose before they agree to cosign. Explain the pros and cons of being a cosigner and what impact it could have for them. Discussing expectations around repaying the loan is also important so your cosigner knows what to expect.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/can-you-get-an-international-student-loan-without-a-cosigner">Can you get an international student loan without a cosigner?</a>

<h2 id="credit-tips" class="wp-block-heading"><strong>Tips for Improving Your Credit</strong></h2>
Improving your credit score won’t happen overnight, but it is worthwhile to take any steps you can throughout the loan process to boost your credit.

Here’s a few tips to help get your credit score in check.

<h3 class="wp-block-heading"><strong>Stay Aware of How Much Debt You’re Taking On</strong></h3>
Your credit score is calculated based on a variety of factors, one being your payment history. In fact, your payment history is the most important part of your credit score, making up 35% of the calculation.


<figure class="wp-block-image size-large is-resized"><img class="wp-image-2224" src="https://wordpress.sparrowfi.com/wp-content/uploads/2022/08/Blog-Imagery-1-1024x576.png" alt="" width="768" height="432" /></figure>


When you take on debt, such as student loans, you are doing so with the understanding that that money will be paid back and paid on time. If you make consistent, on-time payments, it’s good for your credit, as it demonstrates an ability to pay back debts successfully. If you pay late or miss payments, it could hurt your credit, as it demonstrates an inability to pay back debts successfully.

&gt;&gt; <strong>MORE</strong>: <a href="https://www.sparrowfi.com/blog/the-most-effective-debt-payoff-strategy-you-need-to-know">Most effective debt-payoff strategy</a>

While this may sound like a no-brainer, you’ll want to be aware of how much debt you’re taking on. If you take on too much, it could make you more likely to miss a payment or go into loan default.

Remember to be realistic about how much you will be able to afford in monthly payments. Utilizing a <a href="https://smartasset.com/student-loans/student-loan-calculator#quE69fe79Y">student loan calculator</a> to estimate your monthly loan payments after graduation is a great way to get real about whether the loan will be feasible when repayment starts. Let’s use an example here.

Let’s say you’re studying to be a public school teacher, and you land a job making $50,000 a year after graduation. This would land you around $4,200 per month (if we round up) to budget with. <em>(For the ease of this example, we aren’t factoring in taxes.)</em>

Now, let’s say your monthly expenses are as follows:
<ul>
 	<li>Rent: $1,300</li>
 	<li>Utilities: $200</li>
 	<li>Gas: $200</li>
 	<li>Health Insurance: $100</li>
 	<li>Dining Out: $200</li>
 	<li>Groceries: $250</li>
</ul>
You’re left with $1,950 each month. This example is simple and doesn’t factor in taxes or other expenses such as savings, car maintenance, pet costs, entertainment, and more.

If you’re debating a $30,000 student loan at a 9% interest rate and a 15-year repayment term, you’d be looking at a $304 minimum monthly payment. Now remember, this is for <em>one </em>loan. If you took out four of these loans, one for each year you’re in school, you’re looking at an even heftier monthly payment.

So, before taking out a student loan, consider whether the estimated monthly payments would be affordable for you given your future income potential. Being realistic about what you may be able to afford could prevent you from missing a payment down the line.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">What credit score is needed for a student loan?</a>

<h3 class="wp-block-heading"><strong>Keep Open Lines of Credit You Already Have</strong></h3>
The length of your credit history is another important factor in determining your credit score. The longer you have had open lines of credit, the better your credit score will typically be. Having, and properly managing, your credit for a long time shows lenders that you’re responsible.

While it may sound counterintuitive, closing any open lines of credit you currently have could hurt your credit score because it shortens the length of your credit history. Unless you absolutely need to, stay away from closing any current accounts.

<h3 class="wp-block-heading"><strong>Don’t Open New Lines of Credit</strong></h3>
Opening new lines of credit will cause what’s called a hard inquiry. A hard inquiry occurs when a financial institution checks your credit report before making a lending decision. When lenders do a hard inquiry, they’re attempting to assess how you’ve handled your credit in the past.

Just like you’d only lend money to someone you trust, lenders want to make sure you’re a sound investment for them before dishing out the cash. A <a href="https://www.sparrowfi.com/blog/whats-a-soft-credit-inquiry-whats-a-hard-credit-inquiry">hard inquiry</a>, though, can temporarily hurt your credit. So, if you’re looking to take out a student loan anytime soon, we recommend holding off on opening any new lines of credit.

<h3 class="wp-block-heading"><strong>Check Your Credit Report</strong></h3>
If you have bad credit but aren’t totally sure why, you may want to check your credit report. Your credit report is important to look over for many reasons, but especially to check for errors, fraud, or identity theft. Even a small error on your credit report can significantly hurt your credit score, so we recommend checking fairly often.

There are many financial institutions, such as banks and credit card companies, that offer free credit reports. If yours don’t, utilize the free <a href="https://www.annualcreditreport.com/index.action">Annual Credit Report</a> website. You are, by law, entitled to these reports yearly.

<h2 id="h-best-private-student-loans-for-bad-credit" class="wp-block-heading"><strong>Best Private Student Loans for Bad Credit</strong></h2>
First, here's is a list of the top 5 student loans for bad credit. Rather than searching for lenders one-by-one, we recommend starting the process with an automated <a href="https://www.sparrowfi.com/">student loan search tool</a>. After you complete the free <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>, we’ll show you the rates and terms you’d qualify for with 17+ premier lenders.

<h2 class="wp-block-heading"><strong>Final Thoughts from the Nest</strong></h2>
So, yes. You can get a student loan with bad credit. However, it might make the process a bit more challenging. Start thinking ahead about where your credit is at, and if it’s not ideal, start taking small steps to build it. To <a href="https://www.sparrowfi.com/">find a private student loan</a> for students with bad/no credit, complete the <a href="https://www.app.sparrowfi.com/login/type">Sparrow form</a> today.

 
<div class="wp-block-spacer" aria-hidden="true"></div>
 

<em>Sparrow's goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em>

<h3><strong><a href="https://asla.accountcenter.studentloan.org/inschool/welcome?ref=arspar&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=spar-is&amp;qfid=affiliate-000-000">Arkansas Student Loan Authority</a></strong></h3>
The Arkansas Student Loan Authority (ASLA) is an Arkansas state entity that provides educational funding for all Arkansas students who wish to attend higher education institutions. ASLA has a minimum credit score requirement of 670. ASLA is a great option for Arkansas students.

<h3><strong><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000">Ascent</a> </strong></h3>
<a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000">Ascent</a> is an online lender that offers educational funding for students. They offer three types of student loans: a traditional cosigned loan, a non-cosigned credit-based loan, and a non-cosigned outcomes-based loan. Collectively, the three options provide a great selection for those who do not have a cosigner available, are international or DACA students, or have lower credit scores. Ascent’s minimum credit requirement varies based on the loan.

<h3><strong><a href="https://studentloans.com/?mc=0000009i">Brazos</a></strong></h3>
Brazos is a non-profit lender offering educational funding through private student loans available only to Texas Residents. They offer a wide range of loan options, covering undergraduate, graduate, MBA, law, medical, dental, veterinary, and doctoral degree programs. Brazos does not disclose their minimum credit requirement. Brazos is a great option if you live in Texas and want competitive interest rates.

Federal student loans don’t require you to have a good credit score, or any credit at all. Private student loans, on the other hand, do.

How and Where to Get Private Student Loans for Bad Credit

https://wordpress.sparrowfi.com/wp-content/uploads/2021/07/cards2.png

<p>While an important piece in determining your eligibility for financial aid, Expected Family Contribution, or EFC, is often misunderstood.</p>
<p>Here’s what you need to know about Expected Family Contribution for <a href="https://www.sparrowfi.com/blog/ultimate-fafsa-guide">FAFSA</a> purposes.</p>


<h2 id="h-what-is-expected-family-contribution" class="wp-block-heading"><strong>What is Expected Family Contribution?</strong></h2>
<p>Expected Family Contribution, or EFC, is a number used to determine how much financial aid you are <em>eligible</em> to receive, including grants and federal student loans.</p>
<p>EFC is calculated using a <a href="https://studentaid.gov/complete-aid-process/how-calculated">formula</a> established by law. The formula uses information such as:</p>
<ol>
<li>Your/Your family&#8217;s income</li>
<li>Your/Your family&#8217;s assets</li>
<li>Your/Your family&#8217;s benefits</li>
<li>The number of family members in college during the same year</li>
</ol>
<p>This information is then used to estimate the amount of money you and your family would be able to contribute to one year of college costs. By doing so, financial aid programs are able to estimate what your financial need may be when it comes to <a href="https://www.sparrowfi.com/blog/how-to-pay-for-college">paying for college</a>.</p>
<p>Note that this number does not indicate how much you <em>will </em>receive in financial aid or how much you <em>will</em> <em>have to </em>contribute, but rather, how much you are <em>eligible </em>to receive and how much you <em>could </em>contribute.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">The four types of financial aid for students</a></p>


<h2 id="h-why-your-expected-family-contribution-matters" class="wp-block-heading"><strong>Why Your Expected Family Contribution Matters</strong></h2>
<p>Your EFC is important because it contributes to how you are evaluated for financial aid overall, including federal student aid.</p>


<h3 id="h-expected-family-contribution-and-federal-student-aid" class="wp-block-heading"><strong>Expected Family Contribution and Federal Student Aid</strong></h3>
<p>When calculating your <strong>overall federal student aid eligibility</strong>, the federal government uses a formula that takes into account several factors such as:</p>
<ol>
<li>Your EFC</li>
<li>Student enrollment status (full-time, part-time, etc)</li>
<li>Your year in school</li>
<li>The cost of attendance each respective school</li>
</ol>
<p>Federal student aid has<a href="https://www.experian.com/blogs/ask-experian/how-much-money-can-you-get-from-fafsa/#s2"> limits</a>, and thus, your overall federal student aid eligibility helps determine how much of each type of aid you are eligible for.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Student loan eligibility: Private &amp; Federal Student loans</a></p>


<h3 id="h-how-does-my-expected-family-contribution-impact-my-federal-aid" class="wp-block-heading"><strong>How Does My Expected Family Contribution Impact My Federal Aid?</strong></h3>
<p>Your EFC will help determine how much aid you will be eligible for. If your EFC is $0, you will be eligible to receive the maximum amount of federal aid. If your EFC is over a certain threshold, you will receive no aid at all.</p>
<p>Note that these numbers may fluctuate annually to reflect changes in your/your family’s income.</p>


<h3 id="h-your-expected-family-contribution-s-impact-on-financial-aid-overall" class="wp-block-heading"><strong>Your Expected Family Contribution’s Impact on Financial Aid Overall </strong></h3>
<p>Each piece of this overall aid eligibility equation helps paint a bigger picture regarding your finances, and therefore, helps schools understand where you may need financial aid.</p>
<p>How much of your financial need is covered by federal aid may impact how schools fill the remaining gap with aid such as university <a href="https://www.sparrowfi.com/blog/top-6-college-scholarship-sites">scholarships</a> and grants.</p>


<h2 id="h-why-your-expected-family-contribution-changes" class="wp-block-heading"><strong>Why Your Expected Family Contribution Changes </strong></h2>
<p>Your EFC will likely change year-to-year as you or your parent&#8217;s/parents&#8217; income changes. Therefore, the amount of aid you are eligible for each year will also change.</p>
<p>Be sure to <a href="https://www.sparrowfi.com/blog/fafsa-renewal-tips-for-a-quick-fafsa-renewal-process">resubmit your FAFSA</a> each year to ensure that you maintain access to the maximum amount of aid you are able to receive.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/fafsa-requirements-everything-you-need-to-know">FAFSA requirements: Everything you need to know</a></p>


<h2 id="h-how-can-i-calculate-my-expected-family-contribution" class="wp-block-heading"><strong>How Can I Calculate My Expected Family Contribution?</strong></h2>
<p>Let us say this before we give you the breakdown: While you can calculate your own EFC at home, be careful not to get overly attached to this number. At-home estimates are just that: estimates.</p>


<h3 id="h-calculating-the-parental-contribution-to-the-efc1" class="wp-block-heading"><strong><em>Calculating the Parental Contribution to the EFC</em></strong></h3>
<ol>
<li class="wp-block-heading">Add up the total parent income (both taxed and untaxed income)</li>
<li>Subtract allowances for federal and state taxes, as well as any Social Security paid</li>
<li>Subtract an Income Protection Allowance (IPA)
<ol>
<li>This number is intended to estimate how much a family would need for necessities such as housing and food based on its size. This number would be taken out of the overall income when calculating how much a parent would be able to contribute to a child’s education.</li>
</ol>
</li>
<li>Subtract an Employment Expense Allowance
<ol>
<li>This will only apply for households where all parents are working, and will equal 35% of earned income <em>or </em>$4,000 &#8212; whichever is less. This amount is intended to cover the expenses that working parents have such as commuting.</li>
</ol>
</li>
</ol>
<p></p>
<ol>
<li style="list-style-type: none;">
<ol></ol>
</li>
</ol>
<p>After doing this calculation, you will reach what’s called your Available Income (AI). This represents how much of the parental income can be considered for college costs.</p>

<h3 id="h-calculating-the-student-contribution-to-the-efc" class="wp-block-heading"><strong><em>Calculating the Student Contribution to the EFC</em></strong></h3>
<ol>
<li class="wp-block-heading">Add up the total student income</li>
<li>Subtract allowances for federal and state taxes, as well as any Social Security paid</li>
<li>Subtract an IPA</li>
<li>Figure out the Student Contribution from Available Income (50% of the current total)</li>
</ol>
<p>Finally, add the Parental Contribution to the Student Contribution to result in your family’s EFC.</p>


<h2 id="h-commonly-asked-questions-about-expected-family-contribution" class="wp-block-heading"><strong>Commonly Asked Questions About Expected Family Contribution</strong></h2>
<h3 id="h-what-is-the-expected-family-contribution-for-an-independent-student" class="wp-block-heading"><strong>What is the Expected Family Contribution for an independent student?</strong></h3>
<p>When you are a dependent student, your EFC is calculated based on both your parent’s/parents’ income <em>and </em>your own.</p>
<p>However, as an <a href="https://www.sparrowfi.com/blog/how-to-become-an-independent-student-for-financial-aid">independent student</a>, your family’s income will not be used to calculate your EFC. Rather, your own income and assets will be factored into the calculation, minus some deductions.</p>
<p><strong>If you are an independent without dependents, </strong>your EFC will be based on your income (and your spouse’s if you are married) minus taxes and basic living expenses.</p>
<p><strong>If you are an independent </strong><strong><em>with </em></strong><strong>dependents, </strong>your EFC will be based on your income (and your spouse’s if you are married) minus taxes, basic living expenses, and an employment allowance. The employment allowance is available if you are a single working parent or a working student with a spouse.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/how-to-become-an-independent-student-for-financial-aid">How to fill out the FAFSA as an independent student</a></p>


<h3 id="h-what-is-a-good-expected-family-contribution" class="wp-block-heading"><strong>What is a good Expected Family Contribution?</strong></h3>
<p>There is no one specific number that makes your EFC “good.” Generally speaking, however, the lower your EFC, the more financial aid you may qualify for.</p>


<h3 id="h-why-is-my-expected-family-contribution-so-high" class="wp-block-heading"><strong>Why is my Expected Family Contribution so high?</strong></h3>
<p>Your EFC can be high for a variety of reasons, however, it is often high due to having a high income or a lot of assets. Assets are resources that can produce positive economic value such as:</p>
<ol>
<li>Cash</li>
<li>Real estate</li>
<li>Stock holdings</li>
</ol>
<p></p>
<p> </p>
<p>When calculating your EFC, both liquid and illiquid assets are taken into account. Liquid assets are ones that can be sold quickly without losing a lot of their value, such as the money in your bank account or stocks. Illiquid assets, on the other hand, are ones that <em>do </em>lose value when sold quickly, such as cars and real estate.</p>
<p>If you/your family has a low income but a lot of assets, your EFC may be higher than you expected. If this does not seem to be the case, however, consider filing a <a href="https://www.sparrowfi.com/blog/how-to-write-a-financial-aid-appeal-letter">financial aid appeal</a> to have your EFC recalculated.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/how-to-write-a-financial-aid-appeal-letter">How to fill out a financial appeal letter</a></p>

<h2 id="h-final-thoughts-from-the-nest" class="wp-block-heading"><strong>Final Thoughts from the Nest</strong></h2>
<p>Your EFC is one piece of how your financial aid eligibility is calculated. While it isn’t the whole bit, it is important. By estimating your family’s EFC, you can determine what financial gaps may arise after receiving <a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">financial aid</a>.</p>
<p>If scholarships and federal student aid don&#8217;t cover your financial need completely, it may be time to explore a <a href="https://www.sparrowfi.com/student-loan-info">student loan</a> to fill the gap. When you&#8217;re ready, <a href="http://sparrowfi.com">Sparrow</a> is here to help.</p>


While an important piece in determining your eligibility for financial aid, Expected Family Contribution, or EFC, is often misunderstood.

Here’s what you need to know about Expected Family Contribution for <a href="https://www.sparrowfi.com/blog/ultimate-fafsa-guide">FAFSA</a> purposes.

<h3 id="h-calculating-the-parental-contribution-to-the-efc1" class="wp-block-heading"><strong><em>Calculating the Parental Contribution to the EFC</em></strong></h3>
<ol>
 	<li class="wp-block-heading">Add up the total parent income (both taxed and untaxed income)</li>
 	<li>Subtract allowances for federal and state taxes, as well as any Social Security paid</li>
 	<li>Subtract an Income Protection Allowance (IPA)
<ol>
 	<li>This number is intended to estimate how much a family would need for necessities such as housing and food based on its size. This number would be taken out of the overall income when calculating how much a parent would be able to contribute to a child’s education.</li>
</ol>
</li>
 	<li>Subtract an Employment Expense Allowance
<ol>
 	<li>This will only apply for households where all parents are working, and will equal 35% of earned income <em>or </em>$4,000 -- whichever is less. This amount is intended to cover the expenses that working parents have such as commuting.</li>
</ol>
</li>
</ol>

<ol>
 	<li style="list-style-type: none;">
<ol></ol>
</li>
</ol>
After doing this calculation, you will reach what’s called your Available Income (AI). This represents how much of the parental income can be considered for college costs.

<h3 id="h-calculating-the-student-contribution-to-the-efc" class="wp-block-heading"><strong><em>Calculating the Student Contribution to the EFC</em></strong></h3>
<ol>
 	<li class="wp-block-heading">Add up the total student income</li>
 	<li>Subtract allowances for federal and state taxes, as well as any Social Security paid</li>
 	<li>Subtract an IPA</li>
 	<li>Figure out the Student Contribution from Available Income (50% of the current total)</li>
</ol>
Finally, add the Parental Contribution to the Student Contribution to result in your family’s EFC.

<h2 id="h-commonly-asked-questions-about-expected-family-contribution" class="wp-block-heading"><strong>Commonly Asked Questions About Expected Family Contribution</strong></h2>
<h3 id="h-what-is-the-expected-family-contribution-for-an-independent-student" class="wp-block-heading"><strong>What is the Expected Family Contribution for an independent student?</strong></h3>
When you are a dependent student, your EFC is calculated based on both your parent’s/parents’ income <em>and </em>your own.

However, as an <a href="https://www.sparrowfi.com/blog/how-to-become-an-independent-student-for-financial-aid">independent student</a>, your family’s income will not be used to calculate your EFC. Rather, your own income and assets will be factored into the calculation, minus some deductions.

<strong>If you are an independent without dependents, </strong>your EFC will be based on your income (and your spouse’s if you are married) minus taxes and basic living expenses.

<strong>If you are an independent </strong><strong><em>with </em></strong><strong>dependents, </strong>your EFC will be based on your income (and your spouse’s if you are married) minus taxes, basic living expenses, and an employment allowance. The employment allowance is available if you are a single working parent or a working student with a spouse.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/how-to-become-an-independent-student-for-financial-aid">How to fill out the FAFSA as an independent student</a>

<h3 id="h-what-is-a-good-expected-family-contribution" class="wp-block-heading"><strong>What is a good Expected Family Contribution?</strong></h3>
There is no one specific number that makes your EFC “good.” Generally speaking, however, the lower your EFC, the more financial aid you may qualify for.

<h3 id="h-why-is-my-expected-family-contribution-so-high" class="wp-block-heading"><strong>Why is my Expected Family Contribution so high?</strong></h3>
Your EFC can be high for a variety of reasons, however, it is often high due to having a high income or a lot of assets. Assets are resources that can produce positive economic value such as:
<ol>
 	<li>Cash</li>
 	<li>Real estate</li>
 	<li>Stock holdings</li>
</ol>


 

When calculating your EFC, both liquid and illiquid assets are taken into account. Liquid assets are ones that can be sold quickly without losing a lot of their value, such as the money in your bank account or stocks. Illiquid assets, on the other hand, are ones that <em>do </em>lose value when sold quickly, such as cars and real estate.

If you/your family has a low income but a lot of assets, your EFC may be higher than you expected. If this does not seem to be the case, however, consider filing a <a href="https://www.sparrowfi.com/blog/how-to-write-a-financial-aid-appeal-letter">financial aid appeal</a> to have your EFC recalculated.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/how-to-write-a-financial-aid-appeal-letter">How to fill out a financial appeal letter</a>

<h2 id="h-final-thoughts-from-the-nest" class="wp-block-heading"><strong>Final Thoughts from the Nest</strong></h2>
Your EFC is one piece of how your financial aid eligibility is calculated. While it isn’t the whole bit, it is important. By estimating your family’s EFC, you can determine what financial gaps may arise after receiving <a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">financial aid</a>.

If scholarships and federal student aid don't cover your financial need completely, it may be time to explore a <a href="https://www.sparrowfi.com/student-loan-info">student loan</a> to fill the gap. When you're ready, <a href="http://sparrowfi.com">Sparrow</a> is here to help.

<h2 id="h-what-is-expected-family-contribution" class="wp-block-heading"><strong>What is Expected Family Contribution?</strong></h2>
Expected Family Contribution, or EFC, is a number used to determine how much financial aid you are <em>eligible</em> to receive, including grants and federal student loans.

EFC is calculated using a <a href="https://studentaid.gov/complete-aid-process/how-calculated">formula</a> established by law. The formula uses information such as:
<ol>
 	<li>Your/Your family's income</li>
 	<li>Your/Your family's assets</li>
 	<li>Your/Your family's benefits</li>
 	<li>The number of family members in college during the same year</li>
</ol>
This information is then used to estimate the amount of money you and your family would be able to contribute to one year of college costs. By doing so, financial aid programs are able to estimate what your financial need may be when it comes to <a href="https://www.sparrowfi.com/blog/how-to-pay-for-college">paying for college</a>.

Note that this number does not indicate how much you <em>will </em>receive in financial aid or how much you <em>will</em> <em>have to </em>contribute, but rather, how much you are <em>eligible </em>to receive and how much you <em>could </em>contribute.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">The four types of financial aid for students</a>

<h2 id="h-why-your-expected-family-contribution-matters" class="wp-block-heading"><strong>Why Your Expected Family Contribution Matters</strong></h2>
Your EFC is important because it contributes to how you are evaluated for financial aid overall, including federal student aid.

<h3 id="h-expected-family-contribution-and-federal-student-aid" class="wp-block-heading"><strong>Expected Family Contribution and Federal Student Aid</strong></h3>
When calculating your <strong>overall federal student aid eligibility</strong>, the federal government uses a formula that takes into account several factors such as:
<ol>
 	<li>Your EFC</li>
 	<li>Student enrollment status (full-time, part-time, etc)</li>
 	<li>Your year in school</li>
 	<li>The cost of attendance each respective school</li>
</ol>
Federal student aid has<a href="https://www.experian.com/blogs/ask-experian/how-much-money-can-you-get-from-fafsa/#s2"> limits</a>, and thus, your overall federal student aid eligibility helps determine how much of each type of aid you are eligible for.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Student loan eligibility: Private &amp; Federal Student loans</a>

<h3 id="h-how-does-my-expected-family-contribution-impact-my-federal-aid" class="wp-block-heading"><strong>How Does My Expected Family Contribution Impact My Federal Aid?</strong></h3>
Your EFC will help determine how much aid you will be eligible for. If your EFC is $0, you will be eligible to receive the maximum amount of federal aid. If your EFC is over a certain threshold, you will receive no aid at all.

Note that these numbers may fluctuate annually to reflect changes in your/your family’s income.

<h3 id="h-your-expected-family-contribution-s-impact-on-financial-aid-overall" class="wp-block-heading"><strong>Your Expected Family Contribution’s Impact on Financial Aid Overall </strong></h3>
Each piece of this overall aid eligibility equation helps paint a bigger picture regarding your finances, and therefore, helps schools understand where you may need financial aid.

How much of your financial need is covered by federal aid may impact how schools fill the remaining gap with aid such as university <a href="https://www.sparrowfi.com/blog/top-6-college-scholarship-sites">scholarships</a> and grants.

<h2 id="h-why-your-expected-family-contribution-changes" class="wp-block-heading"><strong>Why Your Expected Family Contribution Changes </strong></h2>
Your EFC will likely change year-to-year as you or your parent's/parents' income changes. Therefore, the amount of aid you are eligible for each year will also change.

Be sure to <a href="https://www.sparrowfi.com/blog/fafsa-renewal-tips-for-a-quick-fafsa-renewal-process">resubmit your FAFSA</a> each year to ensure that you maintain access to the maximum amount of aid you are able to receive.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/fafsa-requirements-everything-you-need-to-know">FAFSA requirements: Everything you need to know</a>

<h2 id="h-how-can-i-calculate-my-expected-family-contribution" class="wp-block-heading"><strong>How Can I Calculate My Expected Family Contribution?</strong></h2>
Let us say this before we give you the breakdown: While you can calculate your own EFC at home, be careful not to get overly attached to this number. At-home estimates are just that: estimates.

Your EFC is designed to estimate the amount of money you and your family would be able to contribute to one year of college costs.

What is Expected Family Contribution (EFC)? How Does it Affect Financial Aid?

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