Getting Financial Aid With Bad Credit and No Cosigner

Author: Rebecca Gardner

Trying to get private student loans with no cosigner and bad credit is no easy task.

Private student loans are based on credit, unlike their federal student loan counterparts, which are based on financial need.

Having the appropriate credentials in terms of credit is therefore imperative for a fast approval, and the only real way to get approved with bad credit is by applying with a creditworthy cosigner.

This is how the vast majority of college students get approved for their private student loan funding, and now most private lenders actually recommend applying with a cosigner to make the application that much more efficient from the get-go.

Options Moving Forward

So now you’re probably wondering what your options are if you have bad credit, no cosigner, and require additional financial aid to pay for your educational expenses.

Well, here is a quick rundown of some of your options:

  • Try to improve credit situation
  • Locate a creditworthy cosigner
  • Apply for other kinds of financial aid
  • Continue to apply without a cosigner and see what happens

The last option is not recommended unless you have some serious negotiating skills, or a significant amount of collateral to offer up to private lenders.

Just know that most private education loan lenders have fairly strict approval guidelines, and will have difficulty working with you if you have no cosigner, bad or no credit, and a low or nonexistent income.

Improving Your Credit

Taking the time to improve your credit is something that can increase your chances of getting approved for a private student loan without a cosigner.

While it may be difficult to find the time to do the things that are necessary to improve your credit, there are a variety of options that I recommend to students.

These include, but aren’t necessarily limited to the following items:

  • Resolving any delinquent or default credit accounts
  • Checking credit report for any mistakes
  • Making sure to maintain current credit accounts
  • Taking out new credit in order to establish a proper history

These simple things I recommend to students who need to improve their credit, and it is of course advisable to utilize all four of these concurrently if at all possible to achieve the maximum effect.

Locating a Creditworthy Cosigner

Most students balk at the idea of looking for a cosigner beyond their parents, but they shouldn’t as this can be one of the best ways to go beyond getting denied for a student loan with no cosigner.

Here is a quick rundown of some of the people that you may want to ask to be your cosigner:

  • Parents
  • Other Family members
  • Close friends
  • People you worked with in the past

You don’t of course have to limit your search to these groups of people, and rather you should ask anyone you may have a good rapport with who may have good credit, and a solid financial status.

Just keep in mind that you shouldn’t limit yourself to only your parents, and that asking people you know to be your cosigner isn’t rude or inappropriate if you do it in the correct manner.

Applying for Other Types of Financial Aid

You would be surprised at just how many students who are looking for a private student loan with no cosigner have not even completed their FAFSA, or considered what other types of financial aid may be available to them.

The reality is that private student loan funding should be a last resort option when viewed in comparison with other kinds of aid like grants, and federal student loans.

By maximizing your ability to get this aid you can essentially lessen your dependence on private student loan funding, and actually save money in the process.

The following is a quick listing of the major types of financial aid:

  • Federal Student Loans
  • Private Student Loans
  • Educational Grants
  • Scholarships
  • Work-Study Programs

Federal Student Loans

Federal student loans are education loans that are provided by the federal government via the Department of Education.

They are no longer offered via the Federal Family Education Loan Program, and are now offered exclusively via the Direct Loan Program.

Here are some quick facts about federal student loans:

  • Based on financial need
  • Provided directly via the Department of Education
  • Carry low interest rates and fees
  • Come with flexible repayment options
  • Have capped loan amounts
  • Students must apply via the FAFSA

The main distinction you must keep in mind with federal student loan funding is the fact that they are based upon financial need and not credit—they are often referred to as bad credit student loans because of this.

You can therefore get a federal student loan with no cosigner and bad credit, as credit is not looked upon at all when determining your ability to qualify for such funding.

Federal loans should be applied for before private loans, and must be applied for via the FAFSA.

Educational Grants

Educational grants can provide a substantial amount of funding to any student who is need of such aid, and the great thing is that this type of aid is not based on credit.

Some of the more popular federal educational grants include the following:

  • The Pell Grant
  • The Academic Competitiveness Grant
  • The TEACH Grant
  • The FSEO Grant
  • The National SMART Grant

Applying for these federal grants can be done via the FAFSA, which must be submitted by June 30.

The important things to understand about getting a federal grant is that they are unlike student loans in that they don’t have to be paid back, and they are unlike private loan funding in that they are not based on credit.


Scholarship aid is what is called “merit-based” financial aid, and rather than being based on credit or need, most scholarships are based on the student’s ability to demonstrate a particular skill, trait, or achievement.

Because scholarships are not based on credit, they are perfect for students who are looking for private student loans without a cosigner, and because there are thousands of different scholarship awards in existence, almost every student should be able to at least qualify for some scholarship aid.

Here are some quick facts about scholarship aid:

  • Don’t have to be repaid
  • Considered as merit-based financial aid
  • Can provide award amounts up to the cost of attendance
  • Are provided by the postsecondary institution, or other organizations

Students may automatically be granted a scholarship simply by virtue of attending college if they have excelled in a particular area, or they may have to be applied for independently.

The bottom-line with scholarship aid is that the more you can get, the better, as it doesn’t have to be paid back, and can prevent you from having to rely on an abundance of private student loans for any particular school year.

Work-Study Programs

A work-study program is a type of financial aid that provides students with part-time jobs while they are attending class in order to supplement their current financial aid award package.

There are two main types of work-study programs—first there is federal work-study, or FWS, and then there is non-federal work-study, or non-FWS.

Federal work-study is Federal Student Aid that is based on financial need, while non-federal work-study is not affiliated with the federal government, and can be obtained via your school of attendance.

Work-study programs are a great way to avoid going into further private student loan debt, and should be heavily sought after by those students who need additional aid yet have bad credit and no cosigner.


In the end I recommend to both student and parent borrowers to exhaust their other financial aid options before resorting to private student loan funding.

Private student loans cost more, and have fewer repayment benefits than other types of aid, and are of course almost impossible to get approved for when your credit is less than stellar, and you don’t have a cosigner.

The key is to maximize your ability to get the other kinds of aid that I mentioned earlier, and then to look for private funding as a final option.

Moving Forward

This site is dedicated to helping both students and parents get the financial aid they need without having to go into a substantial amount of private student loan debt.

I hope that by viewing the articles and other assets that are found here at, you all can maximize your ability to get the most amount of aid, at the least cost.

Remember that financial aid is here to help you pay for college, not act a detriment to your ability to live, by doing your homework and becoming informed you all should be able to accomplish your educational goals in the most efficient manner possible.

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