As tuition costs soar ever higher each year, it’s increasingly common to find students turning to other sources besides their parents to fund their higher education.

The sticker shock of undergraduate or graduate school can give even the most savings conscientious parents cold feet when it comes to footing the bill for their beloved children.

So, how are you supposed to pay for college when your parents can’t? Assuming you’ve exhausted all scholarships, grants and work-study options, student loans are the next logical step.

Let’s also assume your parents have decided not to be co-signors on any of your loans, or not to take out a PLUS (Parent Loan for Undergraduate Students) for various reasons.

Once it’s clear you are on your own when paying for college, consult the student aid office of any and all schools you are thinking of attending. They can be invaluable in providing loan information because they’ve lived through thousands of scenarios with students before you. They can tell you what combinations work the best, which lenders get the money to the school/student the most quickly and seamlessly and which ones have favorable repayment terms.

Many student candidates usually then apply for any Federal loans available before applying to private ones. Almost all of them are based on financial need, and have competitive interest rates and terms on their repayment options, plus reasonable deferment and forgiveness plans under the right circumstances. Also, some (not all) Federal loans are subsidized, which means interest does not accrue during the time you’re in school.

Federal Student Loans

Federal Student Loans

The United States Department of Education has made the application process relatively easy. They will provide a Free Application For Student Aid (FAFSA), which is the first stop when applying for any number of federal loans such as the Stafford or Perkins.

When you are ready to fill out FAFSA, you will be asked for information like: your Social Security number, your driver’s license number if you have one, and citizenship information, You will need to provide federal and state tax information or tax returns for yourself and spouse, if applicable. You might need to provide information including, but not limited to, veteran or military credentials.

Once you have filled out the FAFSA, you will shortly receive your Student Aid Report (SAR), which tells you things like your EFC (Estimated Family Contribution) and what you can expect to receive from federal loans to help fill in the gaps between school costs and what you can pay.

For private loans, the process can vary from company to company, but mostly you can fill out a form much the same way as above. The difference is, they will probably take an extra day or two to check your creditworthiness through any of the federal credit reporting companies, and then calculate what they are able to loan.

You will need to then sift through any and all offers by private loan companies to figure out which offer the best interest rates, repayment plans, and customer services.

Once you have decided upon any loans and designated your school of choice, contact the college or university’s loan office again, which will tell you what the next steps are for connecting the loan with the school, and making sure the monetary disbursement process is set up in your name.