Explore federal and private options, rates, borrowing limits and more.
What student loans are available to undergraduate students?
Both federal and private student loans are available to undergraduate students. Federal student loans are typically less expensive and have more flexible repayment options than private student loans. This is why financial aid offices and even private lenders tend to encourage students to apply for federal loans first before considering private financing.
Federal student loans for undergraduates
Undergraduate students have more federal loan options available to them than any other type of student. They currently include:
Private student loans for undergraduates
Private student loans are designed to cover education expenses where federal loans fall short. Most providers offer funding for undergraduates, though you’ll likely need to bring on a parent or guardian as a cosigner to meet the credit and income requirements.
They’re typically more expensive than federal loans and have less flexible repayment plans and fewer forgiveness, deferment and forbearance options. But you can generally cover all of your school-related costs, including housing and other living expenses.
Compare private student loans
Some private student lenders also offer parent loans as an alternative to the Parent PLUS Loan. These sometimes have more competitive rates, though repayment terms are often shorter and less flexible — parents generally only have 10 years to pay them back.
To get around this, parents can refinance a private parent loan for a longer term or into their child’s name.
Can I get a student loan without a cosigner?
It’s possible to get a private student loan without a cosigner as an undergraduate, though your options are limited. These loans are often designed for international students who don’t know a qualified US resident to cosign their loan. They tend to come in smaller amounts with higher rates and shorter terms.
What’s the maximum for undergraduate student loans?
How much you can borrow as an undergraduate depends on several factors. Federal loans come with annual limits depending on the loan type, year you are in school and whether the Department of Education (DoE) considers you a dependent or independent.
Private and parent student loans are typically based on your school’s cost of education, though some have lifetime limits.
|Type of loan||Typical annual maximum|
|Direct Subsidized||$3,500 to $5,500|
|Direct Unsubsidized||$5,500 to $12,500|
|Parent PLUS||Up to 100% of the school-certified cost of attendance.|
|Private undergraduate||Up to 100% of the school-certified cost of attendance.|
|Private parent||Up to 100% of the school-certified cost of attendance.|
How much do undergraduate student loans cost?
It depends on the type of student loan. The easiest way to compare the cost of a loan is by looking at its annual percentage rate (APR), which includes both interest and fees. However, the Department of Education typically quotes the interest rate and fees separately.
|Type of loan||APR|
|Private undergraduate||Typically 3% to 18%|
|Private parent||Typically 6% to 13%|
Fixed vs. variable rates on undergraduate loans
Federal student loans for undergraduates come with fixed interest rates that stay the same while you’re repaying your loan. However, private lenders typically also offer variable rates, which can increase or decrease depending on the lending market.
Variable rates are a bit of a gamble — they have the potential to go lower or higher than fixed rates. They also make your monthly repayments less predictable. But if you’re lucky, you could save in interest.
What happens after I take out a student loan?
Typically, full monthly repayments aren’t due until six months after you drop below half time in school, with the exception of parent loans. Private student loan providers often give you the option to make interest-only repayments or small fixed repayments of around $25 while you’re still in school.
Once full repayments start, you have a wide range of repayment plans to choose from with federal loans — including several based on your income or graduated plans that increase over time. Private loans typically only offer one standard repayment plan.
Are there any alternatives to student loans for undergraduates?
There are. In fact, student loans might not be your first choice. These options might help you pay for college at a lower cost:
- Federal aid. When you fill out the FAFSA, you’re also applying for federal student aid aside from student loans — such as work-study and scholarships. These, you don’t have to repay.
- Scholarships and grants. Reach out to your school’s financial aid office to see if there’s any additional funding you could qualify for from private organizations. Typically, these are offered to students with a particular academic focus or demographic.
- Income share agreements (ISAs). Some schools and private companies offer to finance your undergraduate degree in exchange for a percentage of your income over a certain number of years. This could help you save if you’re not planning on going into a high-paying field after graduation.
Undergraduate students generally have more options when it comes to student loans than any other type of student. Federal loans are generally less expensive and should be your first choice before turning to private options.
Learn more about how it all works with our guide to student loans.