Why Do I Need References for My Student Loan?

Applying for a student loan comes with stipulations, including personal references, whose purpose is to confirm your contact information and help locate you if issues arise with your student loan. 

You might need to provide student loan references twice if you have a federal loan: once when you apply for the loan and again when you leave school and enter repayment. With private student loans, you’ll only need to provide references upfront in most cases. Here’s why you need references for a student loan and how to choose the right ones.

Why are references needed for student loans?

College is just the beginning of your journey. During this time, you may experience changes such as: 

• Moving dorms
• Switching to off-campus housing
• Taking a semester abroad
• Moving to another state for a job opportunity
• Spending a gap year in a different country
• Changing your name (marriage, divorce, or gender transition, for example)
• Changing phone numbers

No matter where life takes you, your lender must keep track of how to contact you. It expects to get its money back somehow. 

The primary purpose of references is to locate you if your student loans default. It also allows your loan servicer to get your updated contact information to send important notices regarding your loan. You can expect to supply your lender with two to three personal references. 

Federal lenders often collect references at two points: entrance and exit counseling. Private lenders don’t require exit counseling, so you’ll only provide references when you first apply. 

Entrance counseling

After completing your FAFSA and before signing your master promissory note (MPN), you undergo entrance counseling before federal loan funds are disbursed. This teaches the basics about how your student loan is arranged and what’s required of you. 

This is only required for federal student loans, but many private lenders provide entrance counseling too.

As part of entrance counseling for a federal student loan, you’ll sign an MPN. For private loans, you’ll sign a regular promissory note. Before signing, you’ll provide references to confirm your contact information or vouch for your character.

Exit counseling

When you graduate, drop below part-time enrollment, or otherwise leave school, you must undergo exit counseling for all federal student loans. 

You won’t often need to complete this step if you have private loans. Private loans may offer exit counseling as a service, not a requirement. Some private lenders even suggest consulting with a qualified financial advisor before leaving school to plan your repayment.

Federal student loan exit counseling walks you through the fundamentals of repaying your student loan and helps you set a repayment plan.

At this point, you’ll update your references from student loan entrance counseling or provide new ones. 

References if you’re applying for student loans

Your references won’t determine your eligibility for the student loan. However, they should be people you trust who won’t mind getting a phone call regarding your student loan. 

After you fill out the FAFSA and before you sign your MPN for a federal student loan, you’ll see a request for references. This happens as part of signing your MPN or your entrance counseling, so you’ll need to provide references before your loans are disbursed.  

For private loans, you’ll often provide references during the loan application process and before you sign your loan agreement. 

How many references will you need?

You’ll need to provide two references for most private loans. 

Federal loans ask for two references at entrance counseling and three during exit counseling. 

Your lender or loan servicer won’t check your personal references’ credit, but they should meet basic requirements, including: 

• They’re adults.
• You’ve known them for at least three years.
• The two references don’t have the same address or phone number. 
• They live at an address in the United States.

So let’s say you find a trustworthy reference. You can expect to provide the following:

• Full name
• Full address
• Phone number
• Email (optional)

Ensure the information you provide is correct by confirming with your references beforehand.

References if you’re in student loan exit counseling

Exit counseling is required for federal student loans per federal regulations. Private student loans aren’t held to the same regulations, so it isn’t required.

The standards for the references you provide in exit counseling are similar to those in entrance counseling. 

The main distinctions for exit counseling references are: 

• Must have three references, with one being your closest living relative.
• Each reference must be at least 21 years old.
• Include your expected employer’s contact information, if applicable.
• All references must have a different U.S. address and phone number.
• Your references can’t be other students.
• You’ve known them for at least three years

Your loan servicer can call your references to locate you if it’s unable to reach you about your student loan. Ensure they would be comfortable getting a call in that case.

How to get references for student loans

Being a reference doesn’t carry any financial or credit obligation, so many people don’t mind giving you their information. But it’s best not to assume they’ll be OK with it. Always ask before you list someone as a reference. 

If you get pushback when you ask someone to be a reference, they might think they’ll have to cosign your loan. Ensure they know that’s not the case.

References won’t have to do any of the following:

• Undergo a credit check
• Take on payments if you default on the loan
• Deal with legal action for delinquent or defaulted loans

That might provide your potential reference with peace of mind.

If you don’t pay your loans or fall behind on payments, your lender or loan servicer won’t take action against your references. However, it might reach out to your references to confirm your contact information is up to date.

In most cases, your loan servicer won’t contact the references you provide during entrance or exit counseling right away. This is also the case for private loans. However, give your references a heads-up in case the loan servicer wants to verify your contact information.  

Your lender or loan servicer should only use your references’ information if you enter delinquency or default with your student loans or it can’t contact you.  

Who should my references be for student loans?

Your references should be responsible adults whom you trust.

References for federal loans

Most people choose their parent or a legal guardian as a reference during entrance or exit counseling. When applying for a Federal Direct Loan, a parent or guardian must be a reference on your MPN. 

Exit counseling for federal loans doesn’t require a parent or guardian to be your first reference. Instead, that’s your closest living relative. 

When seeking additional references for entrance or exit counseling, you might choose from the following: 

• Adult sibling who lives at a different address
• Grandparent
• Employer
• Religious leader
• Coworker
• Teacher
• Spouse
• Close friend
• Neighbors
• Siblings
• Aunts or uncles

Choose your references the same way you would choose potential job references. It might be better to avoid listing a friend’s parent, a casual acquaintance, or an ex-employer you only worked for briefly. Use your best judgment. 

References for private loans

References for private loans follow many of the same guidelines as federal loans, but the specifics will depend on the lender.

If a potential reference shares the same address, your lender or loan servicer might not accept them as a reference. Ensure your references are people who will know where you are and how to contact you for the next several years. 

A reference should be someone you trust. If you default, your lender or loan servicer could share information regarding your last known address or the status of your student loan. In the wrong hands, that could be detrimental.