How do you qualify for a student loan?

Requirements diff depending on whether it's a federal or private student loan

The amount of student loans in the U.S. is soaring: At the end of 2019, it skyrocketed to more than $1.5 trillion.

Continue Reading Below

According to a report published at the beginning of February, education loans accounted for just 6.3 percent of America’s total debt in 2010, roughly $760 billion. That surged to 10.7 percent, or a whopping $1.5 trillion, by the end of the decade.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

According to the Department of Education’s Federal Student Aid office, the maximum amount that an undergraduate student can borrow every year ranges from $5,500 to $12,500, depending on that student’s year in school, dependency status and the type of loan.

There are certain requirements that individuals must meet in order to obtain a student loan, though they differ between federal and private loans.

COMPARE PRIVATE VS. FEDERAL STUDENT LOAN INTEREST RATES

HOW TO PAY OFF $200,000 IN STUDENT LOANS FAST

For a federal loan, individuals must:

  • Demonstrate financial need 
  • Be a U.S. citizen or an eligible noncitizen 
  • Have a valid Social Security number 
  • If you’re a man, you need to be registered in the draft 
  • Be enrolled or accepted for enrollment as a regular student in an eligible degree or certificate program
  • Maintain satisfactory academic progress in college or career school 
  • Sign a form saying you will not default on a federal student loan; do not owe money on a federal student grant; will use federal student aid only for educational purposes 
  • Graduate from high school or receive your GED equivalent

Although specific requirements vary from lender to lender, these are the five most common factors that private banks take into consideration:

  • Be enrolled in an eligible school 
  • Meet age, education and citizenship requirements
  • Plan to use the loan for education expenses
  • Meet credit and income criteria 
  • Be able to apply with a creditworthy cosigner if needed

CLICK HERE TO READ MORE ON FOX BUSINESS