In this era, financing your education can be very stressful if not entirely depressing, more so, if you don’t have a co-signer or an established credit history. Almost all private lenders require a credit check and cosigner, a parent or guardian, to minimize their financial risk.

But what if you don’t have someone to cosign for you? What options are available?

Yes! It is possible to get student loans without a cosigner and credit check. In this article, we are going to explore federal loans, state-based programs, income-share agreements and alternative financing options that can help you to pursue your education without the stress of searching for a cosigner.

Understanding the Challenge: Why Do Lenders Require a CoSigner?

Normally, private lenders ask for a co-signer because in most cases, students don’t have a credit history and stable income. A co-signer, who is usually a parent or relative, becomes the guarantor of the loan if the borrower is incapable of paying it back. Lenders perceive you as a high-risk borrower if you do not have a cosigner. 

However, this doesn’t mean you don’t have other options. Federal student loans and other financing solutions come in handy in funding your education without the need for a co-signer or credit check.

1. Federal Student Loans: The Best No Co-signer Option

The U.S. Department of Education offers federal student loans that don’t need a credit check nor a co-signer. The loans are provided on the basis of financial need instead of creditworthiness, a factor that makes them the best option for students without a cosigner.

How to Apply for Federal Student Loans

One must complete the FAFSA (Free Application for Federal Student Aid) at studentaid.gov to access the federal student loans. Your eligibility for the federal loans, grants, and work-study programs is determined by the FAFSA.

Types of Federal Student Loans

1.      Direct Subsidized Loans

They are need-based loans. This means that the government is responsible for paying your interest while you are in school. However, you are required to start paying the loan after graduation.  

2.      Direct Unsubsidized Loans

This type of loan is available to all students, regardless of their financial need. Here, interest starts accruing immediately after they are disbursed.

3.      Federal PLUS Loans (Credit Check Required)

If you are a graduate or dependent undergraduate student, your parents can apply for Parent PLUS Loan. It is important to note that this type of loan requires a credit check, thus, they would not be an option if your parents have a low credit score.

Benefits of Federal Student Loans

●      Do not require a co-signer

●      Fixed and low interest rates

●      Flexible options of repayment (income-based repayment plans)

●      Available loan forgiveness programs

2. Income-Share Agreements (ISAs): Pay After You Graduate

A number of private organizations and colleges provide Income-Share Agreements (ISAs) as an alternative to traditional student loans. Here, you agree to pay a percentage of your future income for a set period after graduation instead of borrowing money.

How ISAs Work

●     Receive funding for tuition and expenses.

●     Pay a fixed percentage of your salary after graduation. Note: only if you’re earning more than a certain threshold.

●     Payments are done for a set number of years, regardless of the total amount paid.

These programs are mostly ideal for students pursuing high-income fields such as tech, healthcare, and business. You can find ISAs at:

●     Purdue University’s "Back a Boiler" Program

●     Lambda School (Tech & Coding Bootcamps)

●     Colorado Mountain College ISA

3. State-Based and Institutional Loans

A number of state governments and universities give out a “no credit check student loans”.

This program is mostly need-based and serves students who have a limited chance of qualifying for federal aid. State-based and institutional loans have low interest rates and friendly terms of repayment.

How to Find State-Based Student Loans

●     Visit the higher education agency website for your state.

●     Follow up with your college’s financial aid office for institution-based loans.

●     Explore state-run loan programs, such as Texas B-On-Time Loan (for Texas students),

Massachusetts No-Interest Loan Program and New Jersey CLASS Loan Program 

4. Scholarships & Grants: Free Money for Your Education

Securing scholarships and grants is the best ground for minimizing the need for student loans since they are not repaid. You can find thousands of scholarships based on academic merit, financial need, and specific interests. In addition, do not underestimate the power of small scholarships as they can add up and reduce your need for loans.

You can find scholarships and grants at:

●      Fastweb – A huge database of scholarships

●      Scholarships.com – Search by major, background, and more

●      Federal Pell Grant – Need-based grant from the U.S. government

●      Institutional Scholarships – Check your college’s financial aid page

5. Private Student Loans Without a Cosigner (Last Resort)

Most private student loans require a co-signer; however, there are lenders who offer no cosigner loans to students with strong academic performance and future earning potential. Here are

top private lenders that offer no cosigner loans.

●     Ascent – Offers loans for juniors, seniors, and graduate students without a cosigner based on creditworthiness and future income potential.

●     Funding U – Provides loans to undergraduate students without a cosigner, focusing on GPA and academic performance.

●     Earnest – Offers merit-based student loans to students with strong academic records.

It is evident that private loans can come through, but they have a downside of higher interest rates and limited repayment protections than federal loans. It is advisable to consider private loans only when you have exhausted all other options.

Final Thoughts

If you’re looking for a student loan without a cosigner or credit check, your best bet is federal student loans. They provide low-interest rates, flexible repayment plans, and no credit requirements. In case you need additional funding, explore income-share agreements, state-based programs, and scholarships. Private student loans should be a last resort due to higher interest rates.