Student Loan Guide

How to Get a Student Loan

Federal first, private second -- and never borrow more than you need. Here is the full picture.

Student loans fund education costs above what grants, scholarships, and savings cover. The cardinal rule: exhaust free money (grants and scholarships) and then federal loans before ever touching private loans. Here is how to navigate the full process.

Step 1 File the FAFSA

The Free Application for Federal Student Aid (FAFSA) is the entry point for all federal student loans, as well as most state and institutional grants. File it as early as possible -- ideally October 1 of the year before enrollment -- because some aid is first-come, first-served.

The FAFSA determines your Student Aid Index (SAI), which schools use to calculate your financial need and construct an aid package. No FAFSA = no federal loans, no Pell Grants, and potentially no institutional aid.

Step 2 Understand Your Aid Package

Each school will send an award letter breaking down:

Grants (free money -- accept all of it)
Work-study (employment aid -- consider it)
Federal subsidized loans (interest paid by government while in school)
Federal unsubsidized loans (interest accrues from day one)
PLUS loans (parent or graduate borrowing, higher rates)

Only borrow what you actually need after grants and scholarships. Use our student loan calculator to estimate monthly payments before committing.

Federal vs Private Student Loans

Feature	Federal	Private
Credit check	Not required (most)	Required
Interest rate	Fixed by Congress	Variable or fixed; credit-based
Income-driven repayment	Yes	Rarely
Loan forgiveness programs	Yes (PSLF, etc.)	No
Grace period	6 months post-graduation	Varies
Deferment/forbearance	Yes	Limited
Cosigner required	No	Often yes

Step 3 Apply for Private Loans (If Needed)

If federal loans do not cover your full need, private loans fill the gap. Most private lenders require a credit check -- many students need a cosigner with good credit to qualify for the best rates. Shop at least three lenders and compare APR, fees, grace period, and repayment options.

Step 4 Complete Entrance Counseling

First-time federal loan borrowers must complete online entrance counseling -- a brief module explaining your rights and responsibilities as a borrower. You also sign a Master Promissory Note (MPN) committing to the loan terms. Both are required before funds are disbursed.

Understanding Repayment Plans

Federal loans offer multiple repayment options:

Standard (10-year) fixed payment, least total interest
Graduated payments start low, increase every two years
Income-Driven (IDR) -- for loans first disbursed on or after July 1, 2026, the Repayment Assistance Plan (RAP) sets payments at 1%-10% of adjusted gross income with forgiveness after 30 years; older loans keep IBR, which caps payments at 10%-15% of discretionary income with forgiveness after 20-25 years
Extended (up to 25 years) lower monthly payment, significantly more total interest

Use the student loan calculator to compare what you will pay under standard vs extended vs income-driven plans.

How Much Should You Borrow?

A widely cited benchmark: total student loan debt should not exceed your expected first-year salary. If you expect to earn $50,000 out of school, aim to borrow no more than $50,000 total. This keeps the standard 10-year payment manageable within normal budget constraints.

Use the calculator to estimate your monthly payment at different total balances -- and compare that to realistic entry-level salaries in your field before committing to a borrowing level.

The Grace Period

Most federal loans include a six-month grace period after graduation before your first payment is due. Interest continues to accrue on unsubsidized loans during this period. Making interest-only payments during the grace period prevents that interest from capitalizing (being added to your principal).

Free Tool

Estimate your student loan payments

See monthly payments and total interest under standard, extended, and income-driven repayment plans for any loan balance.

Open Student Loan Calculator

Frequently Asked Questions

Should I borrow federal or private student loans first?

Always exhaust federal student loan eligibility first. Federal loans offer fixed interest rates, income-driven repayment options, deferment and forbearance protections, and potential forgiveness programs -- none of which are available on private loans. Only turn to private loans after you have maxed out federal subsidized and unsubsidized loan limits. Private loans should be a last resort after grants, scholarships, work-study, and federal loans are fully utilized.

What is the difference between subsidized and unsubsidized federal loans?

Subsidized Direct Loans are need-based and the government pays the interest while you are enrolled at least half-time, during your grace period, and during authorized deferment. Your balance does not grow while in school. Unsubsidized loans are available regardless of need, but interest accrues from disbursement onward. If you do not pay accruing interest, it capitalizes (adds to your principal) when repayment begins. Subsidized loans are always preferable -- maximize them before taking unsubsidized loans.

How much student loan debt is too much?

A commonly used guideline is to borrow no more than your expected first-year salary. If you expect to earn $45,000 after graduation, borrowing more than $45,000 total creates a repayment burden that strains your budget under standard 10-year repayment. The 10% rule -- keeping student loan payments under 10% of gross monthly income -- is another useful benchmark. Borrowing significantly more than your expected salary typically leads to income-driven repayment plans, extended timelines, and substantially more total interest paid.

When do student loan payments start?

For federal student loans, repayment begins six months after you graduate, leave school, or drop below half-time enrollment -- this is called the grace period. Private loan grace periods vary by lender, typically ranging from 0 to 12 months. During the grace period, interest continues to accrue on unsubsidized and private loans. You can begin repaying during school or during the grace period to reduce your total interest cost -- any amount paid reduces the principal balance that accrues interest going forward.

Can I refinance student loans to get a lower rate?

You can refinance both federal and private student loans through private lenders to potentially obtain a lower interest rate. However, refinancing federal loans into a private loan permanently eliminates access to income-driven repayment, Public Service Loan Forgiveness, and federal deferment and forbearance protections. For borrowers in stable, high-income careers who do not need those protections, refinancing at a meaningfully lower rate can save thousands. For borrowers who may need IDR, are pursuing PSLF, or have unstable income, refinancing federal loans is generally not advisable.

About the Author: De Van Do

De Van Do is the author and site builder behind MyLoanCalcs.com. With a background in technology, De Van Do built this site out of an interest in making financial calculations clear and accessible. De Van Do is not a licensed loan officer, mortgage broker, or financial advisor -- content on this site is for informational purposes only.