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How to Supplement Your Federal Student Loans

The cost of attendance for higher education continues to rise every year. With that, it is more important than ever that you carefully consider your loan options to set yourself up for long-term financial success.

The financial benefits of a college degree are clear. In fact, according to a study by the Association of Public and Land-Grant Universities, as a college graduate you can earn, on average, $1.2 million more throughout your career than those with high school degrees. Even so, many students drop out of college due to unaffordability. This leaves them saddled with student loan debt without a degree to show for it.

To avoid this, there are several options you can choose from if you need additional funding to complete your higher education beyond what you receive from federal student loans.

Private Student Loans

Your first option involves securing more funding from sources other than the federal government. Private lenders, such as banks and credit unions, offer student loans that can be used to supplement federal student loans.
Private student loans may have higher interest rates and different loan structures than federal loans, so it is important to shop around for the best deal and understand the terms and conditions before taking out a private loan. .

Scholarships and Grants

Instead of borrowing more money, you may be able to reduce the amount you need to borrow by earning a scholarship or grant. You can search for scholarships and grants that are offered by private organizations, foundations and even the school you attend. Numerous websites, such as Fastweb and , can help you find relevant opportunities.
Additionally, many colleges and universities offer their own scholarships and grants to students who demonstrate financial need or meet other criteria.

Work-Study Programs

Federal work-study programs allow you to work part-time on or off campus to earn money to help pay for your education. Work-study jobs are typically related to your field of study and offer valuable experience in addition to funding.

Use Personal Savings or Family Contributions

Students can use personal savings or receive financial assistance from family members to help cover the cost of tuition and other education expenses.

Using Private Student Loans to
Supplement Federal Funding

Private student loans are loans offered by private financial institutions, such as banks or credit unions, that you can use to pay for your education.

Federal student loan borrowers often use these private loans when they have reached their maximum federal borrowing limit or need additional funds beyond what is available through federal student loan programs.

Private student loans may be best suited for you if you have already exhausted all your federal student loan options or if you need to borrow more money than is available through federal student loans. However, private student loans may come with higher interest rates than federal loans and may require a cosigner, such as a parent or guardian, to qualify. The student loans offered through the Edly platform are an exception, however, and do not require a cosigner.

When you take out both federal and private student loans to finance your degree, the repayment terms are independent. In other words, you would be responsible for making payments and keeping track of the terms and conditions for each loan separately, making separate payments.

There are several pros and cons to consider when comparing private student loans to federal student loans:

Pros of Private Student Loans:

  • Higher borrowing limits: Private student loans may have higher borrowing limits than federal loans, allowing you to borrow more money if needed.
  • No borrowing caps: Unlike federal student loans, there is no maximum limit on how much you can borrow with private loans so long as funds are for qualifying educational expenses
  • Faster processing: Private student loans are often processed more quickly than federal loans, meaning loan proceeds may get to your school more quickly. As detailed in this article from , processing the FAFSA form can take from three to five days, and receiving your financial aid award letter can take several weeks after that. In contrast, with an Edly student loan borrowers can be pre-approved in minutes, and approved loans can be sent to schools for certification shortly thereafter once the applicant accepts their loan offer. 
  • Can be used for approved education-related expenses: Depending upon the lender, private student loans can be used to cover any education-related expense, including tuition, fees, room and board, textbooks, and other supplies.

Cons of Private Student Loans:

  • Higher interest rates: Traditional private student loans generally have higher interest rates than federal loans, which can result in higher overall costs over the life of the loan. When comparing loans, be sure to look at both the interest rate, which represents the cost of borrowing money, and the Annual Percentage Rate (APR), which factors in any fees and charges associated with loan. 
  • Variable interest rates: Some private student loans have variable interest rates, meaning that the interest rate can change over time, making it more difficult for you to budget for loan payments. In the case of student loans offered through the Edly website, the effective APR will be determined by factors including the income-based repayment percentage and post-graduation income.
  • Creditworthiness requirements: Private student loans may require a credit check, and if you are a student with poor credit or no credit history, you may not be eligible for a loan without a cosigner.
  • Fewer borrower protections: Private student loans may offer fewer borrower protections than federal loans, including fewer options for deferment or forbearance and fewer forgiveness or repayment programs. With student loans offered through the Edly website, borrowers can apply for hardship forbearance for factors including the loss of a job or not earning a salary of at least $30,000.
  • Rigid repayment options: Some private student lenders require specific repayment plans that may be more restrictive than federal education loans. If you are applying for a private loan, make sure you are confident in the terms of your repayment plan.

In summary, private student loans can be a good option if you have exhausted your federal student loan options or need to borrow additional funds beyond what is available through federal loans.

However, you should carefully consider the pros and cons of private loans and compare them to federal loans before making a decision. It is also important to shop around and compare terms from multiple lenders before selecting a private loan.

See if you qualify for our private
student loans

Private Student Loans with No Cosigner:

Some private lenders offer student loan funding without a cosigner. Through Edly , for instance, you can apply for a student loan with no cosigner.

Repayment plans will also vary across different lenders. With student loans offered through the Edly website, your monthly student loan payments are based on the amount you earn after graduation through an income-based repayment plan. As compared to a fixed payment that can become unaffordable at lower income levels, payment amounts for student loans offered through Edly’s site will flex up or down based on your income. Additionally, loans available through the Edly platform allow students to request forbearance if they lose their job or are making below the minimum income.

You can apply for pre-approval today without affecting your credit score  (a soft credit check will be performed).

Financial Aid, Scholarships & Grants

Scholarships and grants are both forms of financial aid that you can use to pay for your education, but there are some key differences between the two.

A scholarship is a type of financial aid that is typically awarded to students based on merit or achievement. Scholarships may be awarded for academic excellence, athletic ability, artistic talent, community service, or other accomplishments. Scholarships are often offered by private organizations, corporations, foundations and universities.

A grant, on the other hand, is a form of financial aid that is typically awarded based on financial need. Grants may be awarded by the federal government, state governments or private organizations. Grants do not need to be repaid, unlike loans.

Qualification criteria for earning a scholarship or grant can vary depending on the specific program.

Grant Criteria May Include:

  • Financial need: Grants are typically awarded to students who demonstrate significant financial need based on factors such as income, assets, and family size. One example would be the Pell Grant, which is considered a Need-Based Grant.
  • Academic achievement: Some grants may be awarded based on academic merit in addition to financial need.
  • Demographic factors: Some grants are targeted towards specific demographics, such as women, minorities, or students from low-income families.

Scholarship Criteria May Include:

  • Academic achievement: Many scholarships are awarded based on academic performance, such as a high GPA or standardized test scores.
  • Talent or skill: Some scholarships are awarded to students who demonstrate exceptional talent or skill in areas such as athletics, music, or the arts.
  • Community service: Some scholarships are awarded to students who have demonstrated a commitment to community service or volunteerism.
  • Demographic factors: Some scholarships are targeted towards specific demographics, such as women, minorities, or first-generation college students.

Types of Grants Available:

  • Federal Pell Grants: This is the first option if you are an undergraduate student and have not earned a bachelor’s or professional degree yet.
  • Federal Supplemental Educational Opportunity Grant (FSEOG): This grant scales with your financial need, awarding up to $4,000 per year depending on your background and financial situation.
  • Teacher Education Assistance for College and Higher Education (TEACH) Grant: Available if you plan to teach in a public or private elementary or secondary school and qualify as a low-income family.
  • State grants: Most states offer grants if you meet certain eligibility requirements. They can be need-based, merit-based, or a combination of both. Check with your college’s financial aid office or your state’s higher education agency to learn more.
  • Institutional grants: Some colleges and universities offer their own grants. Again, these grants can be need-based or merit-based, and the award amount varies depending on the institution's financial aid policies.
  • Private grants: Private organizations, corporations, and foundations may offer grants to students based on factors such as academic merit, financial need, or a specific area of study. You can search for private grants on websites such as Fastweb or

In addition to these criteria, scholarships and grants may have specific application requirements, such as essays, letters of recommendation, or interviews.

It is important to carefully review the qualifications and application requirements for each scholarship or grant you are interested in and to apply for as many opportunities as possible to increase your chances of receiving financial aid.

Applying for Work Study Programs

Work-study programs are a form of financial aid that allow you to work part-time jobs on campus or with approved off-campus organizations to help pay for your education. These programs are typically administered by colleges and universities and are available to undergraduate and graduate students who demonstrate financial need.

Some common jobs associated with work-study programs include:

  • Library assistants
  • Research assistants
  • Tutors
  • Office assistants
  • Lab assistants
  • Resident assistants
  • Food service workers
  • Event Staff

You can apply for work-study jobs through your college or university's financial aid office. Federal Student Aid (FSA) ( also displays resources for finding work-study opportunities.

The process for applying may vary depending on the school, but it typically involves filling out a work-study application and submitting it to the financial aid office. You may also be required to submit a resume and go through an interview process.

To be eligible for work-study programs, you must demonstrate financial need by completing the Free Application for Federal Student Aid (FAFSA).

In addition to financial need, eligibility criteria for work-study programs may include:
  • Enrolled in an eligible degree program
  • Meet satisfactory academic progress requirements
  • U.S. citizen or eligible non-citizen
  • Not in default on any federal student loans
  • Not owe any refunds on federal grants

One of the benefits of work-study programs is that they provide students with the opportunity to gain work experience and develop skills that can be valuable for future employment. 

Overall, work-study programs can be a valuable source of financial aid if you need to earn money to help pay for your education. You should check with your college or university's financial aid office for more information on work-study opportunities and how to apply.


It is important to carefully consider your options and make a plan for how you will pay for your education. In some cases, it may be necessary to combine multiple funding sources to cover the full cost of tuition and other expenses.

At Edly, we partner with FinWise Bank to offer undergraduate loans for juniors and seniors, students in graduate school or undergraduate students who are within two years of graduation for specific programs. These income-based repayment loans do not require a cosigner and are structured to flexibly adjust with your income to stay affordable as you advance your career and your life.

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