Who Can Apply for Student Loans: Federal and Private Rules

Student loan eligibility requirements split cleanly into two tracks. Federal loans are open to any U.S. citizen or eligible noncitizen enrolled in a qualifying program, with no credit check or income test for most loan types. Private loans work the opposite way: the lender decides based on your credit, your income, and usually whether you can bring a cosigner. Major federal changes took effect on July 1, 2026, and they matter most for graduate students and parents.

Federal Loan Requirements Every Borrower Must Meet

Federal student aid is authorized under Title IV of the Higher Education Act, and 20 U.S.C. § 1091 sets out who qualifies.¹ To receive any federal grant, loan, or work-study money, you have to meet every item on this list:

Be a U.S. citizen, U.S. national, or eligible noncitizen.
Have a valid Social Security number.
Be enrolled or accepted for enrollment in a degree or certificate program at a school that participates in federal aid programs.
Hold a high school diploma, GED, or equivalent.
Maintain satisfactory academic progress once enrolled, which generally means at least a C average and completing courses at a reasonable pace.
Not be in default on a prior federal student loan or owe a refund on a previous federal grant.
Certify that the loan money will go toward education-related expenses.

Notice what isn’t on the list. There’s no credit check for most federal loans, no minimum income, no requirement that your parents cooperate financially. Federal lending is built to reach students who need money for school, not to reward people who already have solid finances.

How Eligibility Differs by Loan Type

“Federal loan” isn’t one product. The Department of Education runs several loan types under the Direct Loan program, and the rules tighten depending on which one you want.²

Direct Subsidized Loans

Undergraduates only, and only those who demonstrate financial need based on their FAFSA. The government pays the interest while you’re enrolled at least half-time, during your six-month post-school grace period, and during approved deferments. Graduate students have been shut out of subsidized loans since 2012.³

Direct Unsubsidized Loans

Open to undergraduates, graduate students, and professional students. No need requirement. Interest starts accruing the day the loan is disbursed, and any unpaid interest gets added to your principal balance if you don’t cover it while in school.³

Direct PLUS Loans

PLUS loans are the one federal loan type with a credit check. Parent PLUS is for parents of dependent undergraduates; Grad PLUS was for graduate and professional students, though that program has been changed for new borrowers (see below). The Department reviews your credit for “adverse credit” — bankruptcy, foreclosure, accounts 90 or more days delinquent, similar items. That’s a much lower bar than private lending applies, and having no credit history at all does not count as adverse credit.²

Borrowing Limits After July 1, 2026

How much you can actually borrow depends on your student type, your year in school, and — for graduate students and parents — a set of new caps that took effect on July 1, 2026.

Undergraduate limits didn’t change. Dependent undergraduates can borrow between $5,500 and $7,500 per year in Direct Loans depending on year in school, with a portion available as subsidized if there’s demonstrated need. Independent undergraduates and dependents whose parents are denied a PLUS Loan can borrow more. The undergraduate lifetime aggregate cap stays where it was.²

Graduate and professional borrowing is where the rules moved. The One Big Beautiful Bill Act eliminated the Grad PLUS Loan program for new borrowers after July 1, 2026. Grad students used to be able to borrow up to the school’s full cost of attendance through PLUS with a light credit check; that option is gone for first-time borrowers. In its place, Direct Unsubsidized Loans for graduate and professional students carry new caps: $20,500 per year and $100,000 lifetime for graduate students, $50,000 per year and $200,000 lifetime for professional students in fields like medicine and law. Existing Grad PLUS borrowers who took loans out before the cutoff are unaffected, and prior undergraduate borrowing does not count toward the new graduate limits.

Parent PLUS Loans, which had no fixed dollar cap before, are now limited to $20,000 per student per year and $65,000 total for each student’s undergraduate education. Families that had been using PLUS to close the gap between other aid and full tuition will feel this.

Dependency Status and What It Means for Your Aid

Your dependency classification on the FAFSA decides whether the Department of Education looks at your parents’ financial information when calculating aid, and it shapes how much you can borrow. This trips people up because “independence” here has nothing to do with whether you support yourself or file your own taxes.

You count as independent for the 2026–27 school year if any of the following apply:⁴

You were born before January 1, 2003.
You’re married (separated but not divorced still counts as married).
You’re enrolled in a master’s or doctoral program.
You’re on active duty or a veteran of the U.S. armed forces.
You have children or other dependents who receive more than half their support from you.
You were an orphan, ward of the court, or in foster care at any time since age 13; you were a legally emancipated minor; or you’re an unaccompanied youth who is homeless or at risk of homelessness.

If none of those fit, you’re a dependent student even if your parents don’t claim you on their taxes, don’t live with you, and refuse to help pay for school.⁴ Students in genuinely difficult family situations — abuse, abandonment, parental incarceration — can ask their school’s financial aid office for a dependency override. The office reviews the circumstances case by case and expects documentation such as written statements from professionals familiar with the situation, court records, or police reports.

Eligibility for Noncitizens and International Students

Federal aid isn’t reserved for citizens. An “eligible noncitizen” qualifies for the same loan programs a citizen does. The categories are:⁵

Permanent residents with a valid Form I-551 or I-151.
Refugees and asylees with a qualifying Arrival-Departure Record (I-94).
Conditional permanent residents.
Cuban-Haitian entrants, eligible even if the document’s expiration date has passed.
T-visa holders (victims of human trafficking) or children of T-1 visa holders.
Battered immigrants who qualify under the Violence Against Women Act.
Parolees admitted for at least one year with intent to become a citizen or permanent resident, with special rules for certain Ukrainian and Afghan nationals.
Citizens of the Freely Associated States (Federated States of Micronesia, Republic of the Marshall Islands, Republic of Palau), though this group is limited to Pell Grants, Supplemental Educational Opportunity Grants, and Federal Work-Study.

Certain Native American students born in Canada who hold status under the Jay Treaty of 1794 may also qualify.⁵ For every other category, expired documentation disqualifies you until you provide updated proof of eligible status.

DACA Recipients, F-1 and J-1 Students, and Undocumented Applicants

If you fall outside the eligible noncitizen categories, federal aid isn’t available. That includes DACA recipients, international students on F-1 or J-1 visas, and undocumented applicants. The private market is the main alternative. Most private lenders will consider these applicants with a creditworthy cosigner who is a U.S. citizen or permanent resident, and the cosigner has to meet the same income and credit standards the lender applies to any domestic borrower. International students also need to show proof of current visa status and enrollment at a recognized institution.

Criminal Convictions and Incarceration

Drug convictions no longer disqualify you from federal aid; that restriction ended on July 1, 2023. Students confined in adult correctional or juvenile justice facilities have limited eligibility while incarcerated but regain full eligibility on release. Probation, parole, and halfway-house residence do not by themselves block you from federal aid.⁶

Private Student Loan Requirements

Private lenders ask a different question than the federal government does. Federal lending asks whether you’re enrolled and eligible. Private lending asks whether you’re likely to pay the money back. Underwriting turns on credit, income, and debt load.

Credit Score and History

Most private lenders look for scores in the high 600s at minimum, and many prefer 700 or above.⁷ A lower score won’t always mean denial, but it usually means higher rates, worse terms, or a required cosigner. Students coming straight out of high school rarely have enough credit history to qualify alone, which is why the cosigner rate on private student loans has historically topped 90%.

Income and Debt-to-Income Ratio

Lenders check how much of your income already goes to existing debt. Most want a total debt-to-income ratio at or below 50%, with some stricter. If you don’t have income yet — which describes most full-time students — the lender looks at your cosigner’s ratio instead.

Age and Cosigner Rules

You generally need to be at least 18 to sign a binding loan contract. Students under 18 or with thin credit files need a cosigner, who takes on equal legal responsibility for the debt. If you stop paying, the lender can go after the cosigner for the full balance, and late payments show up on the cosigner’s credit report for the life of the loan.⁷

Some private lenders offer cosigner release after the primary borrower hits certain milestones, and the exact conditions vary by lender and are spelled out in the loan’s terms.⁸ Common triggers include a set number of consecutive on-time payments and evidence that the primary borrower now meets the lender’s credit and income standards on their own. Not every lender offers release, so ask before signing.

How You Can Lose Federal Eligibility

Meeting the requirements once doesn’t lock in aid forever. Two situations knock students out most often.

The first is failing satisfactory academic progress. Schools review your standing at least annually. Fall below the minimum GPA or complete too few credits relative to what you’ve attempted, and the school places you on aid warning or suspension. Most schools let you appeal by documenting what happened — a medical emergency, a family crisis — and submitting an academic plan showing how you’ll recover.

The second is default. Stop paying on a Direct Loan for about nine months and you’re in default. That triggers wage garnishment, seizure of tax refunds, and loss of eligibility for any new federal aid. You can restore eligibility through loan rehabilitation, but only once. Rehabilitation requires nine voluntary, affordable monthly payments within 20 days of each due date across 10 consecutive months, with each payment based on a percentage of your discretionary income. Complete it and the default comes off your credit history, collections stop, and your federal aid eligibility returns.⁹

1
Office of the Law Revision Counsel. 20 USC 1091 – Student Eligibility
2
Federal Student Aid. Federal Student Loans
3
Federal Student Aid. Subsidized and Unsubsidized Loans
4
Federal Student Aid. Dependency Status
5
Federal Student Aid. Eligibility for Non-U.S. Citizens
6
Federal Student Aid. Eligibility for Students With Criminal Convictions
7
National Credit Union Administration. Private Student Loans
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Consumer Financial Protection Bureau. If I Co-Signed for a Private Student Loan, Can I Be Released From the Loan?
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Federal Student Aid. Getting Out of Default