Can I Get a Federal Student Loan With Bad Credit?

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Undergraduates will have no problem getting a federal student loan with bad or no credit, but it’s a different story for graduate and parent borrowers.

How undergrads can get a federal loan with bad credit

College undergrads can get a federal student loan no matter what their credit history looks like — even if they don’t have any credit history at all. As long as their school participates in Title IV federal student aid funding, they can get a loan.

College undergrads can get a federal student loan no matter what their credit history looks like.

Federal direct student loans for undergraduates are available by submitting the Free Application for Federal Student Aid, or FAFSA. The application is the key to getting not only loans, but grants, scholarships and work-study, too. After you apply, you’ll receive a Student Aid Report detailing all the aid you’re eligible to receive. Accept all free aid before turning to loans.

» MORE: How to take out student loans without your parents

How to get a PLUS loan with bad credit

Parents and graduate students with bad credit (a score below about 630) will have more hurdles in the loan process.

Parents and graduate students with bad credit will have more hurdles in the loan process.

PLUS loans require parent and graduate student borrowers to meet specific credit standards, but they are based less on credit score than having adverse credit history. Adverse credit history is a negative mark on your credit report such as recent debt in collections or a foreclosure.

» MORE: Should parents pay for college?

If you have adverse items on your credit history, you might still be able to get a federal loan, but you’ll need to do PLUS Credit Counseling and either apply with an endorser (in other words, a co-signer who doesn’t have adverse credit history) or appeal the credit decision by offering up evidence of extenuating circumstances for the negative marks.

Apply for federal PLUS loans by submitting the FAFSA along with a loan application for graduate students or a loan application for parents. The FAFSA is also the best first step to get more information on applying with an endorser or appealing a credit decision.

How to get additional student loans with bad credit

There are no private parent loans if you have bad credit. But there are options available if you’re an undergrad who maxed out their federal loans and needs more money or are a grad student with adverse credit history.

» MORE: Student loans for bad or no credit

If you have bad credit or no credit, a private lender will require you to have a co-signer who can meet credit and income requirements. For certain loans, you may also be assessed for future income prospects. Compare options and rates from multiple lenders.

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