As a college student, you may find yourself in a situation where you need more money than you originally borrowed to cover the cost of your education. You might be able to get additional funds by requesting a federal student loan or a private education loan.
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Direct Subsidized Loans and Direct Unsubsidized Loans
Direct Subsidized Loans and Direct Unsubsidized Loans are both federal student loans. Federal student loans usually offer lower interest rates and more flexible repayment options than private loans, so it’s always a good idea to start with them.
Direct Subsidized Loans is for undergraduate students with financial need, while Direct Unsubsidized Loans are available to both undergraduate and graduate students.
Your eligibility for student loans is based on your cost of attendance, your grade level, and other financial aid you’re receiving. If you want to increase the amount of your loan, you’ll need to submit a new Free Application for Federal Student Aid (FAFSA®) form.
If you’re eligible for more student loans, your school’s financial aid office will send you an award letter with the new loan amount. You’ll then have to decide whether to accept the loan and, if so, how much you want to borrow.
To get a sense of how much more money you might be able to borrow, look at your school’s cost of attendance. This is the total amount it will cost you to attend school, including tuition and fees, room and board, books and supplies, and other expenses. If your original loan amount doesn’t cover your cost of attendance, you may be able to borrow more.
You can also talk to your school’s financial aid office about your options for increasing your loan amount. They may be able to help you find other sources of financial aid, such as scholarships or grants.
Direct PLUS Loan
If your original loan was a Federal Direct Stafford Loan, you can apply for a Direct PLUS Loan, it is designed for eligible parents and graduate or professional students.
The maximum amount you can borrow is the cost of attendance (COA) minus any other financial aid you receive. If you’re a graduate or professional student, you can also get a Direct PLUS Loan to help pay for school-related expenses, such as your COA, minus any other financial aid you get.
To get a Direct PLUS Loan, you must complete a Direct PLUS Loan Application and Master Promissory Note (MPN). You also need to pass a credit check. If you’re approved, your school will notify you of the amount you’re eligible to receive.
Applying for a Direct PLUS Loan
To apply for a Direct PLUS Loan, you must:
- Complete a FAFSA® form. Be sure to include the school’s code on your FAFSA form so that your school will get your information.
- Complete a Direct PLUS Loan Application and Master Promissory Note (MPN). You can get these forms from your school’s financial aid office or on the Student Loans website.
- Pass a credit check. If you’re approved, your school will notify you of the amount you’re eligible to receive.
If you’re a parent borrowing for your dependent student, you’ll need to sign the MPN. The student won’t need to sign the MPN.
Private Education Loan
If you’re not eligible for more federal student loans, you may still be able to get a private education loan. Private student loans are offered by banks, credit unions, and other lending institutions. They typically have variable interest rates and require a credit check.
Private loans typically have higher interest rates than federal loans, so be sure to shop around and compare offers before you decide on a lender.
If you decide to apply for an private education loan, contact the lender you’re interested in working with to get started. You’ll need to fill out a loan application and promissory note. The lender will also do a credit check.
Before you sign any paperwork, make sure you understand the terms and conditions of the loan, including the interest rate, fees, repayment options, and when payments are due. Once you’ve signed the promissory note, you’re legally obligated to repay the loan even if you don’t complete your education, can’t find a job after graduation, or are unhappy with the education you received.