Does Credit Rating Affect a Federal Family Education Loan Application?

Federal family education loans are the largest source of government-backed student financial aid. This public-private partnership allows private lenders to offer relaxed qualifying criteria on   some loans because they are guaranteed by the government. Some loans require no credit check.

Loans With No Credit Check

The Federal Family Education Loan program, or FFEL, includes the Stafford Loan and consolidation loan programs. In each of these, no credit check is conducted on the applicant. To apply, use the Free Application for Student Financial Aid, or FAFSA, system online.

Loans With a Credit Check

Also among the three major loan programs comprising federal family education loans is the PLUS, or Parent Loan for Undergraduate Students, program. The PLUS program also uses the FAFSA application system but does require a credit check on parents applying for financial aid for a qualifying, dependent student. Also, despite the name, there also are PLUS federal student loans for graduate and vocational school students.

Even if your credit rating is a challenge to qualifying for a PLUS program loan, you can still get approved if you have a qualifying cosigner.

Additionally, if you are seeking a consolidation loan and a PLUS program loan is among the loans you are consolidating, no credit check is required.

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