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Student Loans

Low-Income Student Loans

If you’re a college student or someone planning on pursuing a postsecondary degree with little to no income, a few low-income student loans are available if you’re in need of financial aid. 

We’ve reviewed the types of low-income student loans available, how they work, how to apply, and what you can expect once you start repayment.

LenderBest forIncome requirement?
Dept. of Education Federal student loans✖️
Funding UUndergraduates✖️
AscentDeferred payment✖️*
*For Ascent non-cosigned outcomes-based loans

Student loans for low-income students

The two main types of student loans available to students with low income are federal student loans from the federal government and private student loans, which you can get from private lenders.

Federal student loans

Direct Subsidized Loans and Direct Unsubsidized Loans are federal student loans available to undergraduate and graduate students enrolled at least half-time

With fixed interest rates that don’t change over the life of the loan, they can offer students a more affordable way to fund their education. These loans don’t require a credit check or income verification, allowing many students to be eligible. 

With Direct Subsidized Loans, the federal government pays the interest while you’re in school or deferment, but you must demonstrate financial need to qualify. Direct Unsubsidized Loans aren’t need-based, and interest accrues from the moment your funds are disbursed.

You can learn whether you’re eligible for federal student loans by completing the Free Application for Federal Student Aid (FAFSA).

Private student loans for low income

Private student loans from institutions such as banks and credit unions tend to have stricter eligibility criteria, including credit checks and minimum income requirements, to ensure borrowers can repay their loans and avoid defaulting. 

Some lenders require borrowers who are unable to meet the income requirements to have a cosigner who must repay the loan if the borrower can’t. That might not help if a would-be cosigner doesn’t have a strong income or meet other criteria. We’ve done our research on three low-income student loans available to borrowers in financial need.

Funding U

Best for undergraduates

4.7 /5
LendEDU Rating

Why it’s one of the best

Funding U specializes in loans for undergraduates, particularly those without a cosigner. The company evaluates academic performance instead of credit history, making loans more accessible to students with limited credit.

Offering fixed interest rates and a straightforward application process, Funding U is dedicated to helping undergraduates finance their education. This focus on accessibility and simplicity makes it an excellent option for low-income students.

  • Fixed interest rates: 7.49%12.99% APR
  • No cosigner required
  • Focus on academic performance


Best for deferred payment

4.3 /5
LendEDU Rating

Why it’s one of the best

Ascent offers deferred payment plans, allowing students to start repayment after graduation. This feature provides financial breathing room as students transition into their careers. Ascent also offers non-cosigned loans for students without a cosigner.

With flexible repayment terms, Ascent caters to diverse financial needs. Its focus on borrower-friendly policies makes it a strong choice for students needing deferred payment options.

  • Interest rate (APR): 9.28%15.44% (no cosigner); 4.29%16.09% (cosigned)
  • Deferred payment options
  • Non-cosigned loans available
  • Generous repayment terms


3.9 /5
LendEDU Rating

Why it’s one of the best

Edly stands out with its income-based repayment plans, ensuring that payments are manageable based on the borrower’s income after graduation. This approach helps alleviate the financial burden on low-income students.

Edly’s flexible payment terms and emphasis on future income potential make it a viable option for those concerned about postgraduation earnings. Its commitment to supporting low-income students through innovative repayment options sets it apart in the student loan landscape.

  • Income-based repayment plans
  • Flexible payment terms
  • Supports future income potential

How to apply for low-income student loans

In our student loan guide, you can learn about the steps you must take to apply in more detail. 

Our expert, CFP® Erin Kinkade, recommends taking the following steps to maximize your eligibility for grants, scholarships, and other non-loan financial aid options:

  1. File forms as early as possible
    • Meet all application deadlines. Use a calendar or planner, make a schedule, and stick to it. 
    • Gather application materials early.
    • Request letters of recommendation early.
    • Write a great essay (and request assistance if needed).
  2. Minimize your assets
    • This is a bit nuanced, but the lower your assets are, the more likely you are to be eligible for loans and grants. 
  3. Understand and use FAFSA strategies
  4. Fill out FAFSA regardless of income 
  5. Prepare for merit-based aid possibilities
    • Don’t ignore small awards 
  6. Attend a scholarship workshop in your area if they are offered
  7. Sing your own praises; promote your strengths

Setting aside time to gather, prepare, and submit documents is crucial. You may need to take a day or two off work or commit a weekend—or two or three—to concentrate on these items.

Erin Kinkade


How to apply for federal student loans

Here are the general steps:

  1. Complete the FAFSA

It may take at least 30 minutes to complete, and you might need to include information such as your Social Security number, tax returns, and marital status.

  1. Wait for your financial aid award letter 

Each school you apply to and are admitted to will send you a letter detailing the aid it will offer you, including grants.

  1. Accept your aid

When you decide which school you’ll attend, it’s important first to accept financial aid that doesn’t need to be repaid. So, you’ll want to accept any grants or scholarships first before you accept a loan. 

How to apply for private student loans

Applying may vary by lender, but these are the general guidelines:

  1. Shop around for a lender

Compare each lender’s terms, rates, and eligibility requirements and choose the one that best suits your financial situation. 

  1. Gather the paperwork you’ll need 

You’ll likely need to provide information such as your Social Security number, tax returns and pay stubs, and details about the school you’ll attend. 

  1. Apply online 

You can apply for most private student loans online in 10 minutes or less and find out whether you’re approved immediately. 

  1. Accept your loan funds 

You can accept your loan and confirm with your lender whether it will distribute the funds to your school or to you and when you can expect your financial aid. 

Check with lenders about any specific loan requirements or timelines, and ensure you understand the terms and interest rates. Several private lenders offer competitive interest rates, but they can vary, and the higher the rate, the more your loan will cost in the long term.

What are the most important factors low-income students should consider when selecting private student loans to minimize future financial burdens? 

Our expert’s advice

Erin Kinkade


I suggest always looking for grants and scholarships that don’t require repayment and applying for these first. The next step is to apply for federal loans and other loans that may provide benefits based on your area of expertise (e.g., education, nursing, public service, and peacekeeping careers, to name a few). These jobs may qualify for loan forgiveness after a specific time working in the field.

How to repay student loans with low income

Here are several practical options and programs to help you manage repayments more easily.

How to repay federal student loans

Four income-driven repayment (IDR) plans for federal student loans generally offer monthly payments of around 10% to 15% of your annual discretionary income for 20- to 25-year terms.

You can use the Federal Student Aid Loan Simulator to learn which plan you may be eligible for and how much your monthly payment could be.

If you’re experiencing financial hardship, you may be able to pause payments through deferment or forbearance due to circumstances such as unemployment, illness, military service, or current enrollment. However, interest may still accrue on your loan, costing you more in the long run.

Another option may be Public Service Loan Forgiveness (PSLF). PSLF forgives the remaining balance on your loan after 120 monthly payments under a repayment plan. You might qualify if you have a disability or work as one of the following:

  • Full-time teacher
  • Government or nonprofit employee
  • Medical professional 

How to repay private student loans

For private loans, you’ll get repayment information from your lender, including your first payment due date. The information should include instructions for setting up your account to make payments online or sending your payments by mail.

Repayment options ‌are sometimes income-based but are usually limited. So one of the best ways to manage repayments is to determine how much you have left over after paying bills and other expenses before you even apply for a loan. This way, you’ll already know how much you can afford to borrow. 

Some private lenders may not offer deferment or forbearance. However, the three we’ve reviewed offer this assistance under certain circumstances.

It’s best to check with your lender and understand its specific repayment requirements. The process, including repayment terms, can vary.


When does repayment on student loans start?

Repayment on federal student loans typically starts six months after graduation, leaving school, or dropping below half-time enrollment. This period is known as the grace period, giving borrowers time to secure employment and prepare for loan payments.

How much can I borrow with student loans?

The amount you can borrow with student loans depends on several factors, including whether they are federal or private loans. For federal loans, undergraduates can borrow between $5,500 and $12,500 per year, while graduate students can borrow up to $20,500 annually. Private loan amounts vary by lender and are often determined by the cost of attendance and creditworthiness.

Do student loans cover living expenses?

Yes, student loans can cover living expenses, including housing, food, transportation, and other personal costs, in addition to tuition and fees. Both federal and private student loans are disbursed directly to the school, which then provides any remaining funds to the student for living expenses.

How we chose the best low-income student loans

LendEDU evaluates student loan lenders to help readers find the best student loans. Our latest analysis reviewed 725 data points from 25 lenders and financial institutions, with 29 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of low-income student loans

LenderBest forIncome requirement?
Dept. of Education Federal student loans✖️
Funding UUndergraduates✖️
AscentDeferred payment✖️*
*For Ascent non-cosigned outcomes-based loans