College tuition is on the rise. The average tuition and fees at a public, four-year college is at $11,260 for state residents, and as high as $41,540 at a nonprofit four-year school, according to 2023 College Board data. Student loans can cover these costs when other financial aid is insufficient, but if you have bad credit, you might face some borrowing restrictions.
It’s still possible to get a student loan with bad credit, though. The federal Direct Loan Program offers options for securing a student loan despite a low credit score. But if you need a private student loan, you might need to meet additional criteria. Here’s a rundown on how to get a student loan when your credit isn’t perfect.
Can you get a student loan with bad credit?
The short answer is yes. You might still be able to get a student loan with bad credit.
Your credit score informs lenders about how well (or poorly) you’ve managed past and current credit responsibilities.
A high credit score can not only help you get approved, but it also unlocks competitive interest rates, and sometimes more repayment term options to choose from.
When your credit score is low, it’s usually a red flag to private lenders who might think you’ll have trouble repaying your loan on time. This poses a greater financial risk on the lender’s side.
Typically, you need good credit to get approved for a private student loan. For FICO scores, a “good” credit score is at least 670.
Keep in mind:
Credit score requirements for student loans vary. Most federal student loans have no credit requirement, while private lenders set their own criteria to determine loan approvals, including requirements for bad credit.
Start with federal student loans
If you have a less-than-ideal credit score, consider federal student loans as a first option. A credit check generally isn’t part of the federal requirements for student loans, which is why maximizing your federal loan borrowing limit can be the best path forward in most situations.
Direct Subsidized and Unsubsidized Loans, which are the most common types of federal student loans, are available to students regardless of their credit history. Both types are available to eligible undergraduate students, though subsidized loans are only offered to undergraduates who demonstrate financial need.
Graduate and professional students are ineligible for subsidized loans, but might qualify for unsubsidized Direct Loans. These loans have a fixed rate, and available repayment terms start at 10 years.
Submit a Free Application for Federal Student Aid (FAFSA) to see if you qualify for Direct Loans despite having bad credit.
Check out: How To Register for the FAFSA [2023]
Direct PLUS Loans for graduates, professionals, and parents
If subsidized or unsubsidized Direct Loans aren’t an option, graduate and professional students or parents of dependent undergraduates can explore Direct PLUS Loans.
PLUS loans require a credit check, but it doesn’t gauge your eligibility based on a minimum credit score. Instead, the Department of Education checks if you have an adverse credit history, like a bankruptcy, repossession, or foreclosure in the past five years, among other adverse credit outcomes.
If you do, you’ll need to secure an endorser (also known as a cosigner) with a clean credit record who agrees to repay the loan if you can’t. Otherwise, your only other option to move forward with a PLUS Loan is providing documentation proving that the adverse credit mark was a result of an extenuating circumstance.
In either situation, you’ll also need to undergo credit counseling for PLUS loan borrowers to get the loan.
Use a cosigner
When it comes to private student loans, some lenders may offer the option to include a cosigner on your loan agreement. A cosigner is an individual who meets the lender’s income and credit criteria, and agrees to take liability for any unpaid loan balance you fail to pay.
In leveraging a cosigner’s creditworthiness, you have a better chance at getting approved and securing a better interest rate and terms. Since this is a major responsibility, a cosigner is typically someone who has a close relationship to the primary borrower (for example, the student’s parent, spouse, grandparent, or older sibling).
Some lenders offer a cosigner release feature in their loan agreement. If your credit improves later on, this feature lets you remove your cosigner’s obligation from the debt. But you’ll need to meet the lender’s release requirements first.
Keep in mind:
Not all private student lenders accept cosigners. Those that do might not offer cosigner release. Make sure expectations are clear between you and your potential cosigner for a smooth borrowing process.
Advertiser DisclosureOverview
Ascent offers several unique borrowing options that you don’t typically see with private lenders. In addition to traditional student loans for undergraduate, graduate, and medical programs, college juniors and seniors may qualify for its Outcomes-Based Loan — which doesn’t require established credit or a cosigner. Instead, Ascent reviews alternate factors such as your school, major, and GPA to determine your eligibility.
Ascent also offers a wide range of loan terms and repayment plans to choose from. You may even qualify for its Progressive Repayment plan, which allows you to start with small payments that gradually increase over time. Borrowers who use a cosigner can release them after as few as 12 payments, though international students don’t qualify for this option.
Loan terms
5, 7, 10, 12, 15, or 20 years
Loan amounts
$2,001 minimum up to your school’s annual cost of attendance; lifetime limits of $200,000 for undergrads and $400,000 for graduates
Eligibility
Must be a U.S. citizen or DACA student enrolled at least half time at an eligible institution. International students with a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
Read full reviewLoan Amounts
$1,000 up to 100% of the school-certified cost of attendance
Overview
College Ave offers a wide range of in-school loans for nearly every type of degree. There are a number of repayment options, and borrowers can choose a unique eight-year repayment term. Plus, graduate, dental, and medical students receive extended grace periods.
You may get easy funding for multiple years — 90% of undergraduates are approved for additional student loans when they apply with a cosigner. However, it can be difficult to remove a cosigner for your loan later on, as you must complete at least half of your repayment term before becoming eligible. That’s significantly longer than some lenders, which may only require one to two years of payments before releasing a cosigner.
Loan terms
5, 8, 10, or 15 years for most borrowers (law, dental, medical, and other health profession students have up to 20 years)
Loan amounts
$1,000 minimum up to your school’s annual cost of attendance; lifetime limits depend on your degree and credit profile
Cosigner release
Available after more than half of the scheduled repayment period has elapsed and other requirements are met
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. International students with a Social Security number and a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
Read full reviewLoan Amounts
$1,000 up to cost of attendance
Overview
Education Loan Finance (ELFI) is a division of Tennessee-based SouthEast Bank owned by Education Loan Finance, Inc., a non-profit whose mandate is to provide access to higher education. ELFI launched in 2015 and offers undergraduate, graduate, and parent private student loans as well as student loan refinancing.
ELFI student loans and refinance loans are available to residents in all U.S. states including Puerto Rico. Borrowers can benefit from no application, origination, or prepayment fees. ELFI also offers flexible repayment terms and competitive rates, however there’s no cosigner release option and the lender doesn’t offer any discounts.
Loan amounts
$1,000 - Cost of attendance
Cosigner release
A cosigner may not be taken off a loan, but the borrower can apply for a new loan without their cosigner.
Eligibility
All 50 states as well as Washington DC and Puerto Rico.
Read full reviewLoan Amounts
$1,000 up to 100% of school-certified cost of attendance
Overview
Sallie Mae offers the Smart Option Student Loan for undergraduate students and a suite of loans for graduate students. You can borrow up to your school-certified cost of attendance and apply just once annually to get the funds you need for the entire academic year. Plus, applying for a Smart Option Student Loan with a cosigner may help you get a better rate.
Through Sallie Mae, you can find a variety of loans designed for specific needs, including loans for MBA programs, law school, medical school, and health profession programs.
Loan terms
10 to 15 years for the Smart Option Student Loan; 15 years for law school, MBA, and graduate school loans; 20 years for medical school loans
Loan amounts
$1,000 up to school-certified cost of attendance. Student must be listed as the borrower, and a parent may cosign.
Cosigner release
After you graduate, make 12 one-time principal and interest payments, and meet certain credit requirements
Eligibility
Must be a U.S. citizen or permanent resident enrolled in an eligible program. Noncitizens residing and attending school in the U.S. may qualify by applying with a creditworthy cosigner, who must be a U.S. citizen or permanent resident, and providing an unexpired government-issued photo ID.
Read full reviewLoan Amounts
$1,000 to $350,000 (depending on degree)
Overview
Citizens offers a variety of student loan types, including loans for undergraduates, graduate students, and parents. Perhaps the most unique feature of Citizens student loans is the option for multiyear approval. If you qualify, you can apply once and borrow for future years with a more streamlined process that only involves a soft credit inquiry.
Student borrowers can defer payments while in school and for six months after graduating. You can also score a 0.25 percentage point reduction on your interest rate for setting up autopay, as well as an additional 0.25 percentage point loyalty discount if you or your cosigner already have a qualifying account with Citizens.
Loan terms
5, 10, or 15 years for student loans; 5 or 10 years for parent loans
Loan amounts
$1,000 minimum, up to a maximum of $150,000 for undergraduate and graduate degrees; $250,000 for MBA and law; and $180,000 or $350,000 for health care student loans, depending on the degree type
Eligibility
Must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible institution. International students can apply with a cosigner who’s a U.S. citizen or permanent resident.
Read full reviewLoan Amounts
$1,000 to $99,999 annually ($180,000 aggregate limit)
Overview
Powered by Cognition Financial, Custom Choice offers student loans for undergraduate and graduate students starting at $1,000. You can borrow up to $99,999 per year with a total aggregate limit of $180,000.
If you apply with a cosigner, you may be able to release them from your loan after 36 on-time payments. You can also receive a 0.25 percentage point discount on your interest rate by setting up autopay, as well as a 2% reduction of your principal balance after graduating.
Custom Choice doesn’t charge application, origination, prepayment, or late fees. It also lets you pause payments through forbearance if you qualify for its natural disaster or unemployment protection programs.
Loan amounts
$1,000 to $99,999 per year (lifetime limit of $180,000)
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. You must also meet Custom Choice’s underwriting criteria for income and credit, or apply with a cosigner who does. Eligible noncitizens such as DACA residents can also qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.
Read full reviewLoan Amounts
$1,001 up to 100% of school certified cost of attendance
Overview
INvested is an Indiana company that offers affordable student loans exclusively to state residents. Loans are available to Indiana students and parents who can meet income and credit requirements, or who have an eligible cosigner. Borrowers can borrow as little as $1,001 or as much as the school-certified cost of attendance minus other aid.
INvested provides detailed information on eligibility so borrowers can quickly determine whether to apply for a loan — however, there’s no option to prequalify with a soft credit check. Cosigner release is also available after just 12 on-time payments, considerably shorter than many other lenders.
Loan amounts
$1,001 minimum, up to the school certified cost of attendance
Eligibility
Loans are available to Indiana residents only. Borrowers must have a FICO score of 670 or higher, a 30% maximum debt-to-income ratio or minimum monthly income of $3,333, continuous employment over two years, and no major collections or defaults in recent years. Borrowers who do not meet income or credit requirements can apply with a cosigner.
Read full reviewLoan Amounts
$1,500 up to school’s certified cost of attendance less aid
Overview
Massachusetts Educational Financing Authority (MEFA) is a not-for-profit lender that offers low-cost undergraduate and graduate school loans to students nationwide. While only fixed-rate loans are available, interest costs may be lower than what you see with other private loans.
While you can apply with a cosigner to lock in the best rate possible, removing that cosigner later may be tough. Only one repayment plan allows cosigner release, and you must make four years of consecutive on-time payments and meet other credit and income requirements to qualify.
Loan amounts
$1,500 minimum up to school-certified cost of attendance
Eligibility
Must be a U.S. citizen or permanent resident, enrolled at least half time at a degree-granting, nonprofit institution, and must maintain satisfactory academic progress. Must have no history of default on an education loan and no history of bankruptcy or foreclosure in the past 60 months. Applicants who can’t meet the minimum credit and income requirements may apply with a cosigner.
Read full reviewLook into bad-credit student loans
If you don’t have access to a willing cosigner, some private student loans are specifically designed for students with no or low credit. These loans operate similarly to a traditional private student loan, but might offer lower borrowing amounts, higher interest rates, or a shorter term.
When shopping around for bad-credit student loans, make sure you’re weighing details, like unique eligibility requirements, loan-related fees, deferment options (if any), and whether it offers flexible repayment (e.g. interest-only payments while in school).
Find Your Student Loan
Research alternative financing
Federal and private student loans are just one type of financial aid you can turn to. Alternative aid options to look into include:
- Grants. This kind of aid doesn’t typically have to be repaid. You can find these at the federal and state level, as well as through your school, private companies, and nonprofits.
- Scholarships. This is another form of gift aid that awards students based on financial need or merit. You can get a scholarship for certain areas of study, communities, and interests and/or skills.
- Income-share agreements (ISAs). ISAs are a type of alternative loan that offers lump-sum financing upfront for school, which you’ll repay using a fixed percentage of your future salary for a certain number of years.
Improve your credit before applying
If you still have several years of school ahead before graduating, it might be a good idea to start improving your credit record today. This could work in your favor the next time you need a loan.
Your credit is impacted by multiple factors, but here are some of the most immediate and effective ways to improve it:
- Repay debt on time. A large part of your FICO score — 35% — is calculated based on your payment history. This includes whether you’ve made the minimum monthly payment, on time, for your outstanding debts. Make sure that you’re paying off your student loans and other debts on time, and for the full amount due.
- Lower unpaid debt balances. The amount of debt you have, such as credit card balances, can affect your student loan approval. If you lean on your credit too heavily, lenders might perceive you as a high-risk borrower who’s financially overextended. Before applying for a student loan with bad credit, consider paying down your other revolving debt.
- Review your credit report. Sometimes your credit score might be dragged down by a data reporting error on your credit report. For example, your score could be lowered if the report includes a defaulted debt that’s actually not yours. Request a copy of your free credit report from AnnualCreditReport.com, and if you see a mistake on it, submit a dispute with each of the three credit bureaus: Experian, Equifax and TransUnion.
Meet the expert:
Jennifer Calonia
Jennifer Calonia is a personal finance writer and editor who was born, raised, and currently resides in Los Angeles. She believes smart money management starts with making financial concepts and advice accessible to the everyday person.