In the United States, individuals with no credit history can still qualify for student loans, with no cosigner necessary. While some federal aid programs do require good credit, neither the Perkins nor Stafford loan programs use credit scoring when issuing loans.
The Perkins Loan Program
The Perkins Loan program provides loans of up to $4,000 per year to students in undergraduate, graduate and professional school programs at an interest rate of 5 percent at the time of publication. The maximum total amount that a student can borrow is $20,000.
The Stafford Loan Program
The Stafford Loan program provides both subsidized and unsubsidized loans at fixed interest rates. Maximum borrowing amounts depend on several factors, including whether the student is enrolled in a graduate or undergraduate program. At the time of publication, the lifetime maximum borrowing limit for undergraduates ranges from $31,000 to $57,000: Students who are financially independent of their parents qualify for the higher amount. Graduate students can borrow up to a lifetime maximum of $138,500, including money borrowed as an undergraduate.
Subsidized vs. Unsubsidized Stafford Loans
The primary differences between subsidized and unsubsidized loans are interest management and financial-need criteria. While eligibility for subsidized student loans is based on financial need, there is no financial need requirement for unsubsidized loans. The government pays the interest on subsidized loans while the student is registered as a half- or full-time student, as well as during the six-month grace period after she leaves school. Students assume full responsibility for all interest accumulated on unsubsidized loans.