Student Loans for College Athletes and How to Apply

If you’re wondering how student loans for college athletes work, you’ve come to the right place! While student-athletes usually don’t apply for student loans until after they’ve been accepted by a college (and after they’ve committed to their college’s athletic program!), 63% of parents wish they had more time to navigate the difficult and confusing process of paying for college.

Most families pay for college through a combination of scholarships, financial aid and federal and private loans. Whether you don’t qualify for financial aid or scholarships, or you’ve already applied all types of scholarships, aid and grants to your college tuition bill and are still left with a large balance, federal student loans and private student loan options offer a way to bridge that leftover cost gap.

What are student loans?

Unlike academic, athletic and merit scholarships and financial aid grants, which don’t have to be paid back, student loans—including federal and private loans—are money you or your cosigner borrows to pay for school now and money that you or your cosigner must pay back (with interest) within a certain period after graduating college.

While student loans can and do help athletes pay for college, students and their families should continue to only apply for student loans after they’ve exhausted all other types of “free money” like scholarships and grants and borrow only what they need, even if they’re offered a larger loan amount than what they owe. 

How do student loans work?

Student loans allow you to borrow what you need to cover any remaining balance on your college tuition bill after you’ve exhausted all your scholarships, grants and other federal aid options.

Federal loans are offered based on need, or at least require families to complete and submit their Free Application for Federal Student Aid (FAFSA) to be eligible. Private student loans are typically credit based, so most students will require a creditworthy co-signer, such as a parent or legal guardian, to be approved.

Like any type of loan, student loans must be paid back, and with interest. The amount of interest, when it starts accruing and when students or their cosigners must start paying back the loan in monthly installments vary depending on the type of loan and a student or cosigners’ creditworthiness and other factors, like income or credit history.

How to apply for student loans

To apply for a federal loan, students must first complete (and submit!) their FAFSA. After your FAFSA results are sent to your college, your college will send you a financial aid offer, which may include a combination of federal and private grants and a list of which federal student loans you qualify for. Students do not have to accept the loan, and they can also choose to accept all or part of the loan depending on their needs.

To apply for private student loans, which are credit based, most students will require a creditworthy co-signer, such as a parent or legal guardian, to be approved. While each private student loan provider has different qualifications, to complete a private loan application, a student (and their cosigner, if applicable) must have the following information:

• Name, address, phone number, email address
• Date of birth
• Social Security Number
• Recent pay stub (no more than 30 days old) or other proof of income and monthly housing payment
• Employer name, phone number and length of employment (if applicable)
• Name of school you plan to attend
• Verification of enrollment at least half-time (typically 6-8 credit hours per semester; varies by school)
• Cost of attendance and any financial aid received (see award letter from your school)
• Student’s anticipated graduation date, loan period and loan amount needed
• Cosigner name and valid email address (if applicable)

Keep in mind that student loan application providers can, at their discretion, always ask for additional ways to verify a student and/or their cosigner’s income and creditworthiness, like rent or mortgage payments, bank statements, paycheck stubs, W-2 forms, tax returns, divorce documents, savings and assets and more.

How much can students borrow for college?

How much students can borrow for college depends on the type of loan they choose. Federal loans are typically more restricted than private student loan options.

Federal student loans

• Undergraduate students. Most student-athletes fall into this category. The maximum amount of federal loans (Direct Subsidized Loans and Direct Unsubsidized Loans) ranges from $5,500 to $12,500 per year, depending on what year you are in college and your dependency status. If your dependency status changes, the loans (and loan amounts) you qualify for can also change.
• Parents (of a dependent undergraduate student(s)). Parents can choose to take out a Direct PLUS Loan to cover any remaining college costs that aren’t covered by financial aid or the Direct Subsidized or Unsubsidized Loans.
• Graduate or professional students. This is the least common loan option for student-athletes, though it may apply to athletes who pursue an accelerated degree, like a five-year undergraduate/graduate degree simultaneously. Graduate students can borrow up to $20,500 each year in Direct Unsubsidized Loans. Students can also combine this loan with a Direct Plus Loan to cover any remaining college costs.

Private student loans

Since private student loans are offered by private lenders, they tend to have higher lending limits than their federal loan counterparts. Each bank or lender will have its own annual limits, or the amount you can borrow per year, that typically range from $25,000 per loan to 100% cost of attendance (or even higher, if you anticipate higher indirect college costs, like travel fees).

Private student loan lenders typically take the following into account when determining the total amount that a student or an eligible cosigner can borrow:

• Creditworthiness, like a strong credit score and history
• Education and employment—some lenders may look at your or your cosigner’s employment history and even your intended major
• Overall cost of attendance: most lenders try to offer financing up to 100% of your total cost of attendance, though this amount may be lower depending on how much you owe after financial aid

Also, since Parent Plus Loans have the highest interest rates of all four federal student loan options, some parents—especially those with a strong credit score—may be able to save money by applying for a private parent student loan instead.

Student loan options

Fortunately, student-athletes and their families have a variety of student loan options to choose from to help pay for college and bring their average cost of college down. Families can choose from federal loans and private student loans, including federal and private student loans for parents.

Federal Direct Loans and PLUS Loans have one standard rate for all borrowers, while private student loan rates are typically based on the borrowers’ creditworthiness.

The U.S. Department of Education offers four types of federal loans:

• Direct Subsidized Loans are for undergraduate students who demonstrate financial need to help cover the costs of college. The interest of the loan is paid by the Education Department while the student athlete is enrolled in college.
• Direct Unsubsidized Loans are for undergraduate, graduate and professional students. The interest of the loan begins accruing as soon as the loan is disbursed, including while the student athlete is enrolled in school.
• Direct PLUS Loans are for graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required.
• Direct Consolidation Loans allow borrowers to combine multiple federal education loans into one loan. This allows for a single monthly payment instead of multiple payments.