Can my child get student loans?
Short answer
Yes, your child can get student loans, but the process depends on their age, credit history, and the type of loan—federal or private. Most federal student loans require your child to be enrolled at least half-time and to complete a FAFSA form. Private loans often require a parent or guardian to co-sign if your child has little or no credit history.
What Are Student Loans for My Child?
Student loans are borrowed money to help pay for college-related expenses such as tuition, housing, books, and supplies. These loans must be paid back with interest, usually starting after the student graduates or drops below half-time enrollment. There are two main types of student loans your child might consider: federal student loans and private student loans.
Federal loans are funded by the government. They generally have fixed interest rates and flexible repayment options like income-driven plans, grace periods, and deferments. These loans do not require a credit check or co-signer, making them more accessible to students with no credit history.
Private student loans come from banks, credit unions, or other private lenders. They often require a credit check and a co-signer (usually a parent or guardian) if your child has limited or no credit history or income. Interest rates on private loans can be fixed or variable and are often higher than federal rates.
For example, if your child needs $15,000 for a year of college, they might borrow $5,500 in federal Direct Subsidized Loans (which don’t accrue interest while enrolled), $2,000 in Direct Unsubsidized Loans, and the remaining $7,500 from a private lender with you as a co-signer.
Understanding these basics helps parents prepare financially and emotionally to support their child’s college costs and avoid surprises related to borrowing and repayment.
How Does My Child Get a Federal Student Loan?
To get federal student loans, your child must fill out the Free Application for Federal Student Aid (FAFSA) every year they attend college. FAFSA collects information about your family’s finances to determine your child’s eligibility for federal financial aid, including grants, work-study, and loans.
Here’s how the process works:
- Your child completes the FAFSA online, listing the colleges they plan to attend. You, as a parent, will likely need to provide financial information and sign the form electronically.
- Each college uses FAFSA data to create a financial aid package, which may include federal student loans.
- Your child reviews the award letter and decides which loans and aid to accept.
- They complete Entrance Counseling (an online tutorial) and sign a Master Promissory Note agreeing to repay the loan.
- The school credits the loan money to tuition and fees, and any leftover funds are given to your child for other expenses.
For example, if your child’s award letter offers a $3,500 Direct Subsidized Loan and a $2,000 Direct Unsubsidized Loan, they might accept both. The government pays the interest on the subsidized loan while the student is in school, but the unsubsidized loan begins accruing interest immediately.
Federal student loans have fixed interest rates and repayment plans that adjust to your child’s income after graduation. Parents usually don’t have to co-sign these loans, making them less risky for families.
Can My Child Get Private Student Loans Without Credit History?
Private student loans can cover costs beyond federal loans and grants but usually require a credit check. Since most students have little or no credit history or income, lenders often require a parent or guardian to co-sign the loan.
If your child applies for a private loan without a credit history, here is what typically happens:
- The lender reviews your credit score, income, and debt to decide if they will approve the loan.
- You may be asked to co-sign, which means you share legal responsibility for repayment if your child can’t pay.
- Interest rates and terms depend on your creditworthiness. A better credit score usually means lower rates.
For example, if your child needs $8,000 more than what federal aid covers, a private lender might approve the loan only if you co-sign. If your credit score is good, the interest rate might be 6% fixed; if your credit is lower, it might be higher.
Some lenders offer loans without a co-signer but require a creditworthy student, proof of income, or higher interest rates. These loans are riskier and often more expensive.
Before considering private loans, exhaust all federal aid options, scholarships, and grants. If you must co-sign, understand your responsibilities and monitor the loan closely.
Why Does It Matter If My Child Gets Student Loans?
Student loans can help your child access higher education but can also create a financial burden if not managed carefully. Borrowing responsibly affects your child’s credit, future financial options, and emotional well-being.
Why this matters:
- Loans must be repaid with interest, which adds to the total cost of education.
- Excessive borrowing can delay milestones like buying a home or saving for retirement.
- Defaulting on loans damages credit scores, making it hard to get a job, rent an apartment, or get insurance.
- Early financial education about loans teaches your child money management skills.
Parents play an important role in helping children understand how much to borrow and the long-term impact. Talk openly about:
- How much college will cost overall
- What your family can realistically contribute
- The difference between loans, grants, and scholarships
- How loan repayment works and the importance of making payments on time
For example, if your child borrows $30,000 in total loans with a 5% interest rate, they might pay over $40,000 by the time it’s fully repaid. Planning helps keep borrowing within manageable limits.
What Are Common Terms People Mix Up With Student Loans?
Confusion over financial aid terms can lead to mistakes. Here are some common words parents often mix up with student loans:
| Term | What It Means | Does It Need Repayment? |
|---|---|---|
| Grants | Free money based on financial need | No |
| Scholarships | Free money based on merit or other criteria | No |
| Work-Study | Campus jobs to earn money during school | No |
| Parent PLUS Loans | Federal loans parents borrow to help pay costs | Yes, parents are responsible |
| Credit Cards | Revolving credit for purchases | Yes, high interest if unpaid |
| Personal Loans | Unsecured loans from banks or lenders | Yes, generally higher interest |
Knowing the difference helps avoid borrowing more than necessary or using expensive credit options for education costs.
What Should Parents Do Next to Help Their Child With Student Loans?
Here are concrete steps parents can take to support their child through the student loan process:
- Complete FAFSA Early: Help your child fill out the FAFSA as soon as possible after October 1 each year to maximize aid chances. Use the IRS Data Retrieval Tool to simplify income reporting.
- Review Award Letters Together: Compare financial aid packages carefully. Look at loan amounts, interest rates, grants, and scholarships. Ask the school’s financial aid office questions if anything is unclear.
- Set Borrowing Limits: Talk about how much your child should borrow based on expected income and living costs. A good rule is to borrow only what is absolutely necessary.
- Consider Co-Signing Carefully: If a private loan requires a co-signer, understand the risks and obligations. Review the loan contract before signing.
- Explore Scholarships and Grants: Encourage your child to apply for scholarships regularly. Small awards can add up and reduce loan needs.
- Teach Budgeting: Help your child create a budget to manage expenses and minimize reliance on loans. Use clear examples: “If your monthly rent is $600 and groceries $200, you should aim to spend no more than $100 on entertainment.”
- Understand Repayment Options: Before accepting loans, discuss how repayment works, including grace periods, deferment options, and income-driven plans.
- Monitor Credit: Encourage your child to check credit reports annually at AnnualCreditReport.com and keep an eye on loan balances.
By taking these steps, parents can guide their child toward responsible borrowing and financial literacy.
How Can Parents Protect Themselves When Co-Signing?
Co-signing a student loan means you are equally responsible for repayment. Protect yourself with these strategies:
- Only Co-Sign if Confident: Make sure your child understands loan terms and is committed to repayment.
- Request Loan Details: Obtain a copy of the loan agreement and understand interest rates, fees, and payment schedules.
- Set Up Automatic Payments: To avoid missed payments that can damage your credit, set up autopay if possible.
- Communicate Regularly: Stay in touch with your child about their financial situation and loan status.
- Know Your Rights: If payments become difficult, contact the lender immediately to discuss options.
- Check Your Credit Reports: Monitor your own credit for any changes related to the loan.
- Consider Refinancing Later: After your child has built credit, they may be able to refinance to remove you as co-signer.
For example, if your child misses a $300 monthly payment, you will receive the notice and the missed payment affects your credit score. Acting quickly can prevent long-term damage.
Frequently asked questions
Can my child get student loans if they’re under 18?
Many lenders require borrowers to be at least 18, but some private lenders allow younger borrowers with a co-signer. Federal loans generally don't have a minimum age but require enrollment and FAFSA completion. See and for more on loans for minors.
Do parents have to pay their child’s student loans?
Parents are not responsible for federal student loans borrowed by their child unless they co-sign or take out a Parent PLUS loan. Private loans co-signed by parents make them equally responsible for repayment.
What happens if my child can’t repay their student loans?
Federal loans offer options like deferment, forbearance, and income-driven repayment plans to ease payments. Private loans may have fewer options, so contact the lender immediately to discuss alternatives.
Can my child get student loans without filing FAFSA?
Most federal loans require FAFSA, but some private lenders do not. Private loans usually require a credit check and often a co-signer.
How can my child build credit while in college?
They can build credit by responsibly using a student credit card, paying bills on time, and keeping balances low. Avoid missing payments or borrowing more than needed.