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What are the best student loans to apply for?

I'm starting to apply for loans and want to find out which ones will have good interest rates and come from trusted places.
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3 answers

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Caitlin’s Answer

Hi Jillian!

First and foremost, the absolute best loans are the federal loans offered directly through your school.

Then I had the best luck with well established banks such as Discover, Wells Fargo, etc.

I would recommend avoiding generic loans not backed by banks such as Sallie Mae, Younomics, etc. even if their rates seem lower at first. They sold my loans to other providers shortly after graduation and these new loan holders jumped my rates to a higher level.

Hope that helps! Good luck in school!

Caitlin recommends the following next steps:

Apply for financial aid at FAFSA. (
Apply for student loans with federal government (
Apply for student loans with banks (‎)(
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Andrea’s Answer

Hi Jillian!
I agree with Caitlin above when it comes to applying for Federal Loans, especially in this day and age. In some cases you can even receive assistance or forgiveness from the government to help with paying back your federal loans. That is not the same case if you take out a loan through another bank such as Citizens, Discover, etc. Don't forget though, you can always refinance your loans as you go to receive lower rates ( depending on what interest rates are at the given time).

Also, in some cases, your career path may assist you in loan forgiveness. For example, I was a teacher in Philadelphia after graduating from college. If I would have continued on that path, a percentage of my student loan debt would have been 'forgiven' as a means of compensating me for continuing my teaching career with the city.

Hope this helps!
Best of luck!
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Shea’s Answer

Hi Jillian!

I spent some time working in financial aid at my college and like everyone else said, try and max out your Federal Subsidized loans first, then look at Federal Unsubsidized loans. You haven't mentioned what your experience is with Federal Pell grants, so I'd recommend trying to max them out first for as long as possible.

In the last year or so a lot of students and their families have had dramatic changes to their financial stability due to Covid-19, so even if your FAFSA (which is based on 2019 taxes) says you aren't eligible for grants, check with your Financial Aid office to see if you could possibly qualify for a reduction of income appeal.

Also, check and see if your school offers Income Service Agreements, which are not traditional loans, but rather an income based repayment option where you have to repay x amount of your income after you graduate for a set period of time. I utilized these for my last two semesters of college and will have to make 120 payments that are set at 2% of my gross income.

I'd also recommend reaching out to any student groups/unions that you identify with on campus and seeing if they know of any grant or scholarship programs, the same goes with your actual school. Typically a universities office of scholarship and financial aid deals with school-wide merit scholarships and grants, and don't have as comprehensive of a scholarship/grant directory.

Private and bank loans are the last resource you want to utilize because their interest rates can bury you over time depending on your career path and degree field. If you have to go with private loans, prioritize going through credit unions in your area, which typically have more favorable rates, and try to go for fixed rate loans. Variable rates are unpredictable and can result in you owing a lot more money over time.