Student Loans That Do Not Require A Cosigner

Federal Direct Loan Program

The Federal Direct Loan Program gives eligible students access to federal loans without requiring a cosigner. Students who have never had their student loan payments automatically withdrawn from their paycheck can use these loans to cover all of their educational expenses. Private student loans do not require a cosigner either if they do not exceed $28,500.00 in loan amounts.

Perkins Loan Program

This program offers low interest rates and flexible repayment terms to eligible borrowers. These loans account for about 15% of all federally subsidized student loans. In order to qualify for Perkins loans, students need to be enrolled at least half time in undergraduate studies and meet specific income requirements.

PLUS Loans

PLUS loans provide additional funding for eligible students who demonstrate financial hardship. Eligible applicants include those whose families make less than $80,000 per year and are currently working toward earning a bachelor’s degree. Students may receive up to $23,000 for undergraduates and $20,000 for graduate students.

Student Loans That Do Not Require A Cosigner

Federal Direct Loan Program

The federal direct loan program provides loans at a lower cost than private lenders. You do not need a cosigner for these loans. However, if you have bad credit, you may want to consider applying for alternative types of student loans.

Perkins Loans

Perkins loans allow for low-interest rates in comparison to other types of student loans. You do not need to obtain co-signers for these loans.

Parent Plus Loans

Parent plus loans allow parents who hold a credit card to borrow money for their children’s education. Parents can get their own credit cards even if they don’t have perfect credit.

Student Loans That Do Not Require A Cosigner

Payoff

If you get a student loan and have never had credit cards before, then chances are you’ve never had a credit card statement. If you have ever gotten a credit card statement, you probably know what I am talking about. You may not realize that having a credit card does not mean you need a cosigner on your student loans; however, if you do have any outstanding debts, it is likely that they would want to check out your credit history. While your credit score isn’t the only thing lenders look at, it still factors heavily into how much money you qualify for. In fact, you could even think of your credit score as your first impression to a lender.

Private Student Loan

The federal government gives students who attend public schools financial aid through the Direct Subsidized Loan program, which is offered to individuals whose family income is under $60,000 per year. However, private student loans are often given to students who attend private school. Unlike the government, private lenders don’t require applicants to provide their parents’ information, which makes them less risky than traditional student loans. On top of that, private lenders tend to give borrowers higher interest rates than federal loans. However, private education loans are not as accessible to people who attend college outside of urban areas.

Graduated Repayment Plan

A graduated repayment plan is similar to a standard student loan but comes with some unique features. Undergraduate students might find this option useful because they won’t have to make payments until after graduation. Graduate students, however, may find this option difficult because their loans are tied to their current employment status. If they lose their job, they will have to start repaying their loans immediately. Also, unlike a standard loan, graduate students aren’t eligible for deferments. In addition to these restrictions, graduated repayment plans can cost an undergraduate an extra $5-10 a month.

Income Based Repayment (IBR)

Unlike a standard loan, an income based repayment plan doesn’t set a fixed payment amount. Instead, it bases repayment on a borrower’s salary and adjusts payments each month depending on how much money he or she earns. Borrowers pay no interest while they’re employed, and they’ll pay 10% of their discretionary income once they leave full-time work. Discretionary income is defined as everything that a person earns over their base salary plus taxes. Most employers calculate discretionary income using W-2 wages, while others use Form 4852. Students should keep track of their discretionary income throughout the academic year and report this figure to their loan servicer each quarter.

Federal Stafford Loan Consolidation

Federal consolidation loans consolidate all of the federal loans taken out by students in order to streamline the payment process. Most borrowers end up consolidating their loans because it is cheaper to make one monthly payment rather than many small ones. At the time of writing, the average interest rate for federal consolidation loans was 3.86%.

Federal Perkins Loan

Perkins loans are designed specifically for students enrolled in vocational programs, including agriculture and veterinary science. Like all federal loans, Perkins loans offer several advantages to borrowers. For example, Perkins loans are funded directly by the U.S. Department of Education, making them exempt from state and local property tax collection. Another perk is that Perkins loans come with low interest rates, which means that graduates can save thousands of dollars over the course of their careers.

Federal PLUS Loan

PLUS loans are federally subsidized loans that help parents finance the educational costs of their children. To avoid paying high fees and rates, parents usually opt to take out private loans. However, PLUS loans have lower interest rates than private loans, and they’re granted without a credit check. Parents can borrow up to the combined cost of tuition, fees, room and board, books, supplies, and transportation. Plus, PLUS loans are guaranteed by the federal government, meaning that they carry little risk for the lender.

Student Loans That Do Not Require A Cosigner

Direct Subsidized Loan (Direct PLUS)

If your parent’s income is low enough that they would qualify for federal student loan assistance, you may be eligible for a subsidized loan if you are enrolled at least half time in your undergraduate program. You might receive a direct subsidy only on the portion of repayment that exceeds 10% of the total monthly payment amount, depending on the specific plan chosen.

For example, a student who chooses the standard 10-year repayment plan could have their cost covered if payments exceed $400 per month. If payments do not exceed $400 per month, you need to pay any remaining balance yourself.

The exact amount of coverage varies based on your income level, so it is best to check out your federal financial aid award letter to get a better idea.

Parent Plus Loan (Parent Plus)

If your parents’ income is high enough that they would not benefit from federal student loan assistance, then you still may qualify for a student loan by choosing a parent plus plan. Under these plans, your parents’ earnings count toward your eligibility. Your repayment options vary based on how much money your parents make, but you should avoid having them cosign your loan unless absolutely necessary.

Federal Perkins Loan

With this loan option, you can borrow funds for educational purposes without needing to prove that you will earn less than your parent(s). These loans require a minimum GPA requirement of 2.0 and offer different repayment options based on various factors.

Unsubsidized Student Loan

This type of loan does not require any parental help, and the interest rate is fixed throughout the repayment period. However, repayments start immediately upon receiving the first disbursement and are due each semester. Repayment begins six months after graduation, regardless of whether you’ve graduated or dropped out.

Student Loans That Do Not Require A Cosigner

Federal Student Loan

The federal student loan program provides loans to students who have financial need based on their family income. Eligible borrowers can receive up to $23,000 per year without putting money down. Borrowers should expect to pay interest rates between 2% and 6%.

Perkins Loan

Students with exceptional financial need may be eligible for the Perkins Loan program. Eligibility for the Perkins Loan is determined based upon the cost of attendance at the institution attended. Students will not incur any origination fees or application fees when applying for this loan. Students are allowed to defer payments without penalty until December 15th of the third year after graduation (this is known as extended forbearance). There is no limit to the total amount borrowed under this program. On average, borrowers do not borrow more than 100 percent of the cost of attending school.

To apply for the Perkins Loan, students must complete the Free Application for Federal Student Aid (FAFSA) as well as the institutional certification checklist. In order to be considered for the Perkins Loan, institutions must fill out the Perkins Certification Form. The Department of Education determines whether or not applicants qualify for these types of loans. If accepted, students will have to agree to repay the funds they received. Penalties exist for those who default on these types of loans. 3. Parent PLUS Loan

Parents can also help their children attend college by taking out a Parent PlusLoan. These types of loans provide parents with lower fixed rates and longer repayment terms. Parents must have a good credit history, and their annual income cannot exceed $250,000. Effective July 1, 2015, parent PLUS loan limits increased to $2,500 for undergraduate students and $8,100 for graduate students. Previously, only married couples were able to take out parent PLUS loans, but now divorced parents can also access these funds.

If you would like to apply for a parent PLUS loan you will first need to contact your child’s school. Many schools offer scholarships or grants to students whose parents have taken out PLUS loans. ly/PLUSLoansSchoolGrantInquiry

Direct Subsidized Loan

Direct subsidized loans are similar to PLUS Loans but work on a sliding scale basis. Like PLUS Loans, direct subsidized loans require low to moderate-income earners (dependent on the student’s household income) and lack private alternative programs. Direct subsidized loans offer lower fixed rates compared to PLUS Loans. Disadvantages of direct subsidized loans include higher monthly payments and a shorter grace period.

Direct Unsubsidized Loan

A direct unsubsidized loan works similarly to a PLUS Loan, with the exception that it does not use the borrower’s income as a factor. Direct unsubsidized loans are available for borrowers with negative equity. Students may find these loans advantageous if they have poor credit ratings or bad credit scores. However, interest rate and payment options differ greatly from PLUS Loans.

Private Alternative Loan Programs

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