If you were denied a student loan, you still have options to find the money you need to pay for school, including scholarships, grants, and federal loans. These are all available regardless of your circumstances.
If you applied for — and were denied — a student loan, you can still find funding and also improve your chances of obtaining financial aid.
Various types of grants and scholarships are available, including:
Federal Pell Grants, which are typically awarded to undergraduate students, don’t have to be repaid unless your enrollment status changes (for example, you went from full-time to part-time status or received other grants and scholarships that reduced the amount of federal aid needed). The maximum amount is currently $6,895 a year, and you’ll need to complete the Free Application for Federal Student Aid (FAFSA) to be considered for this grant.
Depending on your school, you may also qualify for a Federal Supplemental Educational Opportunity Grant (FSEOG) in the range of $100 to $4,000 a year, if you’re an undergraduate student. Not all schools participate in this program, and participating schools only receive a certain amount of funds from the U.S. Department of Education (which is why it’s important to fill out the FAFSA as early as possible each year).
If you plan to get a degree in an education field, the Teacher Education Assistance for College and Higher Education (TEACH) Grant is available for those who commit to spend at least four years teaching in a high-need field at an elementary or secondary school (or an educational service agency that provides services or programs to local education agencies). This grant is capped at $4,000, and some of the high-need fields include mathematics, science (including computer science), foreign language, and special education. You’ll need to complete the FAFSA for this grant as well.
If you had a parent or guardian in the U.S. Armed Forces who died during a tour of duty in Iraq or Afghanistan after 9/11, and you’re under the age of 24 and enrolled in college at least part time, you may qualify for an Iraq and Afghanistan Service Grant. The maximum yearly amount is $6,895, and a FAFSA is required.
You may also qualify for national, regional, and even local scholarships. For example, the College Board lists scholarships based on interests, situations and circumstances (child of divorced parents or you’re an employed student), and affiliations (for example, you were in the Boys & Girls Club). Other categories include citizenship and certain professions (engineer, doctor, etc.). There’s also a miscellaneous category.
If you can’t get approved for a student loan on your own, one option is to ask a cosigner — for example, you may be able to get your parents to cosign the loan. You’re still responsible for paying back the loan, but your cosigner shares equal responsibility.
If you miss those monthly payments, both of your credit scores will be impacted. And if you can’t pay back your loan, the cosigner becomes legally responsible for doing so.
If you’re going to apply for a loan with a cosigner, you need to be sure you can handle the payments, since any missteps on your part can negatively impact that person’s finances.
Related: Learn more about getting a private student loan on Credible.com
Federal student loans are based on need, not your credit score. But if you’re a graduate student or a professional student — or your parents are cosigning, your credit history is important to get a Direct PLUS Loan.
For example, you would be denied for having an adverse credit history if you have a tax lien, foreclosure, repossession, bankruptcy, or over $2,000 of debt that is either 90 days delinquent, in collection, or charged off. But if none of these scenarios apply to you, check your credit report to ensure it doesn’t contain errors.
Applying for a student loan with a private lender also means you need to meet certain eligibility requirements, such as stable income and good credit. If you’re unable to qualify on your own, it’s important to get more information on why you were denied.
If you applied for a student loan with a cosigner and you were still denied, you may have asked the wrong person to cosign.
However, these next steps can get you back on track.
It’s best to borrow what you need via federal student loans (which tend to have the lowest rates), and if that’s not enough to cover your expenses, bridge the gap with a private student loan.
If you aren’t able to borrow enough to cover the full cost of school, consider pursuing more scholarships and grants, or dropping to part time. You can also piecemeal these options — for example, get a grant from one source, add a scholarship from another source, and also work part time.
There are ways to increase your chances of having your student loan application approved. Fill out the FAFSA so you can qualify for financial aid and make sure to complete the form by the FAFSA Federal deadline for the academic year. Keep in mind that your college and even your state may have different deadlines, so it’s a good idea to check and adhere to those as well.
Examine your budget to figure out how much of your education costs you can cover on your own, including housing, books, and fees. The less you borrow, the less stress you’ll have when making those monthly payments.
If you’re getting a private student loan, it’s a good idea to know your credit score and if it needs improvement, start working on building a good credit history. With federal loans, you won’t have to worry about your credit score as it’s not considered, but if your grades are low you could be denied funding.
If your score’s in good shape, consider getting quotes from multiple lenders before making a decision. The extra time you spend in the research process may help you save thousands in higher interest rates.
Finally, speak to a financial aid counselor about tips they might have for your particular school. You can also ask other students who’ve gone through the funding process as borrowers, since they’ll have first hand experience to give you.
Related: Learn more about getting a private student loan on Credible.com