How early you should apply for a student loan really depends on two things: whether you are trying to decide which school to attend based on what kind of financial aid you can get, or whether you've designated your school of choice and need to figure out which loans you will use to pay for it, and how large they will have to be.
Either way, you should first think about what kinds of free aid and gifts are out there once you've determined you will attend a school of higher education. You should exhaust these sources before you apply for student loans.
Then, once you have determined you have a need for a student loan, make it number one on your list of things to do when it comes to applying for school.
Private student loan applications are usually free and without obligation. If you are trying to decide which school to attend based on how large of a loan you can get, this can really help you make a decision because you can apply up to a year in advance.
In other words, there's no reason to wait because the application simply allows you to find out how much aid you qualify for, and what kinds of interest and repayment terms could be attractive to you. Since it can take the better part of a year to make all your education considerations fall into place before making your final campus decision, this is a great way to figure out a big factor well in advance.
The process can be likened to getting pre-approved for a home loan, and then shopping for a house. Once you qualify, the lending companies will let you know how long you have to apply it to school before it expires and you have to reapply.
Federal loans are a little different. The FAFSA (Free Application for Federal Student Aid) can't be submitted before the first of January, the year you plan to enroll in your undergraduate or graduate school program. While this gives you roughly nine months to apply for loans, you will need to have your federal income tax returns completed as early as possible, as will your parents if their income level is being considered for your loan.
If it is not possible to complete them before your school's financial aid deadline, it's best to estimate your income and tax liability rather than miss this important date. Of course, you may be waiting to see which college or university you can attend based on what amount of aid comes through this route, so be sure to get all deadlines from all your candidates and hit those dates.
If you've already picked your school of choice, have gotten in and know how much you will need to cobble together to cover the cost, you will need to figure out which loans are most suited to your needs and repayment schedule.
If federal aid is the first route of preference, apply as early as your tax returns are finished or estimated, as discussed above. Begin applying for private loans based on the amount of your upcoming tuition.
Each school has its own deadlines for financial aid form submission, so be sure to check with all the publications from each, scour their websites and consult with their loan coordinators.
All of this information leads to the same conclusion: apply for student loans as early as possible. Try a year in advance of the beginning of classes when considering private loans, which might fund an array of choices. Figure 6-9 months in advance for federal loans. And once you've winnowed down your school choices, apply to the few lenders you wish to use well in advance of when those schools need the information.