NC Assist Blog – How Do I apply for a Student Loan?

3 minute read

Many students use a combination of scholarships and savings but still have a funding gap to fill college costs. When you determine you need a student loan, the next step is understanding how to apply and what you'll need.

It is important to first fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA is required to access federal aid like grants, scholarships, and federal student loans.

Types of Student Loans

There are two main categories of student loans: federal and private.

Federal Loans (U.S. Department of Education)

• Direct Subsidized Loans: For undergraduate students with demonstrated financial need. The U.S. Department of Education pays the interest while you are in school at least halftime, during the grace period, and during deferment periods, which lowers the overall cost.
• Direct Unsubsidized Loans: Available to undergraduate and graduate students regardless of financial need. Interest accrues from the time of disbursement, including while you are in school, resulting in a higher total amount owed over the life of the loan.

Federal loans have annual and aggregate limits. If these limits are insufficient to cover your costs, private loans may be necessary.

Private Loans (Banks, Credit Unions, Nonprofits)

Private loans offer different rates and terms depending on the lender:

• Banks and Credit Unions: These lenders may have varying interest rates and additional fees. It is important to research and compare terms before borrowing.
• Nonprofit Lenders: Non-profits like College Foundation, Inc. (CFI), which offers the NC Assist Loan, are focused on helping students afford college rather than maximizing profits. They often provide competitive fixed rates and no fees.

What’s Needed to Apply for a Student Loan?

Gathering necessary documentation makes the application process smoother. The exact requirements depend on the loan type.

For Federal Loans: You must complete the FAFSA application, which requires your Social Security Number and other financial records.

For Private Loans: You will generally need:

• Proof of North Carolina residency or enrollment at an eligible NC school.
• A good credit score or a creditworthy co-signer who meets income requirements.
• Identification details (Social Security Number, driver’s license number).
• The specific amount you need to borrow and your school's cost of attendance information.

How to Apply for a Student Loan

Most loan applications are completed online via the lender's website. You will create an account, fill out the required information, and submit documentation.

For the NC Student Assist Loan: Visit NCAssist.org, create an account, and follow the prompts using the documents you've gathered.

If your application is approved, you will review the interest rate and repayment options before signing the loan agreement and receiving the funds. You must reapply for funding each academic year you need a loan.