Asked by Erin  |  Submitted September 21, 2015

Can anyone apply for a student loan or is there a cutoff due to income or other factors?

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  Answers  |  1

October 20, 2015

There are several different types of student loans. The Federal Government student loan program has maximum loan amounts. For a dependent student in their freshman year of college, it's $5,500. It goes up from there. All federal government loans are applied to first by completing your FAFSA.

Of the $5,500 (or higher amount), a portion of that can be interest free (Subsidized). To qualify for a subsidized loan, you have to have a low Expected Family Contribution (EFC). If you have a combination of low income & low assets you would have a low EFC.

Define low? Married couple with a dependent student probably $60,000 of income with $40,000 in total assets or less. (Note: not all assets are created equal. AND, not all assets are considered assets. If you have assets, you should consult a College Funding Advisor prior to submitting your financial aid forms.)

Beyond the federal government maximums, you will have to go to a bank to get a loan. Wells Fargo, Discover, and Sally Mae are the big ones but check your local banks as well. The ability to get those loans are dependent on the student & a co-signer's credit score and capacity to repay the loan.

With good credit and the ability to repay the loan, banks will loan you up to 100% of the college's stated Cost Of Attendance (COA). COA will include tuition, room & board, books, transportation, etc. so it should cover ALL of the college costs for that year.

I hope this helps. Please let me know if you have any questions.

Check out this website for additional information and for help with College Planning:


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