Applying for a Federal Student Loan: A Step-by-Step Guide

If you are planning to attend college, obtaining a federal student loan can help you defer the cost of attendance. Federal loans are typically available at lower interest rates than private loans and have the advantage of not being required to be paid back in most cases until six months after you leave school or graduate.

Applying for a federal student loan can be a time-consuming process. It is best to start the process as early as possible in the year. While you will be required to provide income information based on your taxes, you can start the process before you file. Even if you are not going to be attending college until the following fall, it is important to start your free application for federal student aid (FAFSA) as soon as possible after January 1.

Step One: Obtain a PIN Number

In order to complete your FAFSA application and sign your promissory note electronically, you must have a 4-digit PIN number. This number is assigned by the U.S. Department of Education. You can apply for your PIN at While you can apply for your code during your FAFSA application process, the sooner you have the code the better.

Step Two: Obtain College Codes

While you can look up college codes during your application process, it is handy to have the numbers available, if you know which colleges you plan to attend. You can request that your Student Aid Report (SAR) - the report that tells the university how much financial aid you are eligible for based on your FAFSA application - sent to several universities at once, and you can always add additional schools later.

Step Three: Complete the Application

You can complete the entire application online, and if you have obtained your federal PIN number, you can also sign it electronically. Once you submit the FAFSA, your information will be reviewed and your estimated family contribution (EFC) will be determined. This information is transmitted to the schools of your choice (you can add more at any time). From this one application, your status for obtaining both loans and grants is established. In determining the cost of your education, the school is allowed to include estimated costs for room and board, books, fees, and other education costs in addition to tuition, so you may be able to obtain more financial aid than just the cost of tuition.

Step Four: Verification

You may randomly be selected for a verification process with the school you enroll in. The school may require you to provide proof of all income, including tax returns, W-2 forms, 1099 forms, and other information. You are compelled to cooperate with the verification process if you want to get your financial aid.

In order to keep your eligibility status, you also must make adequate progress, which in most cases requires the successful completion of at least 12 credits per semester as an undergraduate or 6 credits per semester as a graduate. Be sure you speak with the financial aid department at the university you plan to attend to find out more specific information related to that school.

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