How to qualify for student loans

By Carolyn Morris | Published on April 21, 2026

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This blog contains links to external pages and resources not managed by Earnest

Applying to college or grad school, but haven’t worked out how to pay for classes yet? Once you have exhausted your financial aid, scholarship, and grant options, you might need to turn to loans to round out your finances.

Before you run out to your local bank, there are some specific education loan options that students should consider.

How to qualify for federal student loans

To receive federal student loans you must meet the following requirements:

• Be a U.S. citizen, eligible non-citizen, or permanent resident
• Have a high school diploma or equivalent
• Plan to or already attend an eligible school
• Have submitted your Free Application for Federal Student Aid (FAFSA)
• Not be in default on any other federal student loan debt
• Maintain Satisfactory Academic Progress
• Be enrolled at least half-time at an eligible institution

Even if you are not sure if you will need a loan to pay for school, every grad or college student should fill out the FAFSA every year they attend school. The FAFSA helps determine your eligibility for federal student loans and how much need-based federal aid you can receive to cover college costs.

Reading your financial aid award letter

In the FAFSA, you include the schools you are either considering or will be attending next year. The financial aid office of each school listed will receive a copy of your application and will include how much the school can offer you based on that information. After your acceptance letter, your financial aid award letter (also called a financial aid package) is the second most important piece of mail you will receive from a school you are considering attending.

Your financial aid letter will include your federal financial aid, any merit-based scholarships, federal loan options, work-study options, and more. Your federal loan options may be listed under Aid Description, Offer of Assistance, Self-Help Aid, or another section.

Federal student loan options

When reviewing your financial aid package, you might see one to all three federal loan options included:

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans

The main difference between subsidized and unsubsidized loans is when interest starts accruing and who is responsible for paying it. Direct subsidized loans are available only to undergraduate students, and the federal government pays the interest while you're in school, during your grace period, and during any deferments.

By contrast, for unsubsidized loans, you pay all the interest, including that which accrues during school, during your grace period, and during any other deferments. Since no one wants to pay more in interest, ideally, undergraduates should max out their subsidized loan options before taking on an unsubsidized loan.

Direct PLUS Loans are available to parents of dependent undergraduate students (Parent PLUS Loan) and to graduate or professional students (Grad PLUS Loan). Unlike the other federal direct loan options, a credit check is required to take on PLUS loans. Similar to an unsubsidized loan, interest accrues while you’re in school, during your grace period, and during any other deferments.

Who qualifies for subsidized federal student loans?

To qualify for a Direct Subsidized loan, you need to be enrolled as an undergraduate and demonstrate a financial need on your FAFSA. If you are applying to grad school, or do not demonstrate financial need, you will only see Direct Unsubsidized Loan or Direct PLUS Loan options in your financial aid package.

How to qualify for private student loans

Unless you apply for a PLUS loan, federal student loans have a maximum loan amount for borrowers each year. If you hit that limit and need additional funding to cover your cost of attendance, you might consider private student loans¹.

Private student loans can offer greater flexibility and may come with different terms depending on the lender. For example, Earnest offers competitive interest rates, a variety of repayment plans, and unique borrower perks, such as the option to skip a payment once per year without penalty². This flexibility can help students better manage their repayment plans.

The qualifications will depend on the lender, but at Earnest we look for the following:

• Must be a U.S. citizen, eligible permanent resident, Deferred Action for Childhood Arrivals (DACA) recipient, or Asylee — or apply with a cosigner who is
• Must live in the District of Columbia or a state we lend in (all 50 states)
• Must be enrolled at least half-time at an eligible institution
• Must meet credit requirements or have a cosigner who does

Earnest also offers a prequalification process, which allows potential borrowers to check what rates they might qualify for without impacting their credit score. This soft credit check can help students and families explore their financing options early and make an informed decision before committing to a loan.

Variable vs. Fixed interest rates

Unlike most federal loans, private lenders evaluate your credit history to determine your interest rate, which may be fixed or variable, based on your loan application. Earnest offers both fixed and variable rate options, giving borrowers more control over how they handle their debt. Fixed rates provide stability by keeping the same interest rate for the life of the loan, whereas variable rates may start lower but fluctuate with market conditions.

Cosigner options

If you have good credit or are applying with a cosigner who has good credit, you might find that you could qualify for a lower interest rate from a private student loan lender than those offered by the US Department of Education. Earnest also makes it possible for students to refinance³ their student loans. Doing so will give borrowers the opportunity to remove their cosigner.

Earnest is known for having no fees—no origination fees, no prepayment penalties, nor hidden charges. This can make it a more affordable choice for students looking to minimize costs over the life of their loan.

Explore your student loan options

Navigating the world of student loans can be overwhelming, but you're not alone. Whether you're considering federal loans, private loans from lenders like Earnest, or a combination of both, it's crucial to understand all your options. Federal student loans often come with benefits like lower interest rates and flexible repayment plans, but if you need additional funding, private loans can bridge the gap.

To ensure you're making informed decisions, take the time to compare loan terms, interest rates, and eligibility requirements. Explore the various options available to you, and consider how they fit into your overall financial strategy for education.

Ready to explore your student loan options? Visit Earnest to find out how their private student loans can help you achieve your educational goals.