Most federal student loans are need-based and do not require co-signers or credit checks, explains Federal Student Aid, an office of the U.S. Department of Education. To apply for federal student loans, students fill out a Free Application for Federal Student Aid, or FAFSA.
Under the William D. Ford Federal Direct Loan Program, the U.S. Department of Education offers direct subsidized loans for students in financial need, direct unsubsidized loans for students who do not need to demonstrate financial need and direct PLUS loans for students with educational expenses that other loan programs do not cover, according to Federal Student Aid. The U.S. Department of Education is the lender under the Direct Loan Program. Under the Federal Perkins Loan Program, the schools lend money to students in financial need, and the students pay back the loan to the schools. Credit checks are required only for PLUS loans.
Students are able to fill out a FAFSA to apply for federal student loans online at FAFSA.gov or by filling out and mailing a paper application, states Federal Student Aid. On the FAFSA, students list colleges or career schools they are interested in, and the schools send students financial aid offers that may include federal student loans. Although students do not need co-signers to accept all or part of a federal student loan, they must complete entrance counseling to be sure they understand the loan process and agree to the loan terms by signing a Master Promissory Note.