Best Student Loans in New York of 2024

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ByChristopher Boston
Edited byVictoria Copans

Updated: December 28, 2023

Advertising & Editorial Disclosure

The cost of college in New York is skyrocketing, and it can be stressful for students and parents alike. Fortunately, finding the best student loans in New York can help you get your degree without breaking the bank.

Based on MoneyGeek’s research, PNC is the best overall provider of student loans in the Empire State. Those who want the lowest interest rates may find Earnest to be the best option, while students with bad credit should consider Funding U. International students may fare best with Ascent, whereas students who need a co-signer may get the best deal from College Ave.


Understanding Student Loans

Student loans serve as the financial bridge that gets you from the dream of higher education to the reality of a diploma in hand. They're not just loans but investments in your future capabilities and career prospects.

With student loans, you borrow money at a certain interest rate, and once your educational journey is complete, you start paying it back, often with a grace period to get you started. The interest accumulates over time, making it essential to understand the terms before signing on the dotted line.

There are two types of student loans:

  • Federal student loans: Federal student loans are backed by the U.S. government, offering lower interest rates and income-driven repayment plans. They also provide options for loan forgiveness in certain career fields.

  • Private student loans: Originating from private entities like banks, private student loans usually require a credit check and come with higher interest rates. Repayment flexibility is generally less generous than federal options.

The importance of differentiating federal and private student loans cannot be overstated. Federal loans usually offer a safety net, with options for deferment and loan forgiveness. Private loans, while useful for filling financial gaps, can be more of a tightrope walk, requiring careful planning and prompt repayment. Your choice between the two will set the tone for your financial health long after graduation.

Best Private Student Loans in New York

Private student loans come from non-governmental sources like banks, credit unions and other financial institutions. These loans can be particularly useful when you've maxed out your federal aid options or are attending a non-traditional educational program that federal loans won't cover.

The upside of private student loans is their flexibility. They can be tailored to cover specific needs, whether tuition, room and board or even study abroad programs. On the flip side, they often come with higher interest rates and more stringent repayment conditions. There's usually no option for loan forgiveness, and deferment possibilities are limited.

Before taking out a private loan, it's essential to scrutinize the terms, including whether the interest rate is fixed or variable. A variable rate might look attractive initially but can skyrocket later, significantly increasing your financial burden.


Federal Student Loans in New York

Federal student loans are educational loans funded by the U.S. government, specifically designed to make higher education more accessible. They come with a range of benefits that can make your financial journey through college less stressful, including:


How to Apply for Federal Student Loans in New York

The journey to securing federal student loans is a straightforward process when you know what steps to take. Below, we provided a detailed roadmap to help you successfully apply for federal student loans.


Prepare necessary documents

Before tackling the Free Application for Federal Student Aid (FAFSA), make sure you have all the necessary information. This includes your Social Security number, your parents' tax returns if you're a dependent and details about your family's financial situation. Being prepared will make the application process smoother and more accurate.


Fill out the FAFSA

The FAFSA is essentially your ticket to federal student loans. It's available online and is crucial for determining your eligibility for federal aid. Be meticulous in filling it out to ensure you qualify for the maximum amount of aid.


Review your Student Aid Report

After your FAFSA is processed, expect to receive a Student Aid Report (SAR). This report is a summary of your FAFSA and should be reviewed for accuracy. It also includes your Expected Family Contribution (EFC), which schools use to determine your financial aid eligibility.


Assess financial aid packages

Upon admission to a school, you'll receive a financial aid package that will outline the types of federal student loans you're eligible for. Take the time to read through the offer, focusing on interest rates and repayment terms.


Accept or decline loan offers

After evaluating your financial aid package, you'll have the option to accept or decline the loan offers. Remember to only accept what you truly need, as these loans will accrue interest. You can usually accept the package through your school's financial aid portal.


Complete entrance loan counseling

Before your loan is disbursed, you'll be required to complete entrance loan counseling. This online tutorial ensures you understand the terms and responsibilities associated with your federal student loan. It's a required step to make sure you're entering into the loan agreement with full awareness.


Sign the Master Promissory Note

The last step in the process is signing the Master Promissory Note (MPN), a legal contract between you and the lender. This document outlines your commitment to repay the loan along with any interest and fees. Read it carefully to understand your obligations fully.

The Types of Federal Student Loans Available in New York

Knowing the different types of federal student loans available can simplify your decision-making process. Each loan type has unique features tailored to meet specific financial and educational needs.

  • Direct Subsidized Loans: These loans are great for undergraduate students with financial need, as the government takes on the responsibility of paying the interest on certain periods. This feature can make a substantial difference in the total amount you'll need to repay. However, there are borrowing limits, which are influenced by your year in school and dependency status.

  • Direct Unsubsidized Loans: Available to both undergraduates and graduates, these loans don't require you to demonstrate financial need. However, you're on the hook for all interest payments, which start accruing immediately upon disbursement. This can make them more costly in the long run if you don't manage the interest while still in school.

  • Direct PLUS Loans: These loans are an option for graduate students and parents of dependent undergraduates. They come with higher interest rates and require a credit check, but they also offer the advantage of covering the full cost of attendance minus any other financial aid. This makes them a valuable resource for filling financial gaps, but it's crucial to be aware of the higher repayment costs.

  • Direct Consolidation Loans: If you have multiple federal loans, Direct Consolidation Loans offer the convenience of merging them into a single loan with one monthly payment. The interest rate is fixed and calculated based on the weighted average of the rates of the loans you're consolidating. While this can simplify repayment, be cautious as you may lose specific benefits associated with your original loans.

Student Loan Forgiveness in New York

Student loan forgiveness is a financial program that allows qualified borrowers to have a portion or all of their federal student loans forgiven, typically in exchange for specific employment or service commitments.

In New York, there are specialized programs that offer this form of debt relief, targeting professionals like teachers and public service workers. These programs are not just financial incentives; they're strategic initiatives aimed at filling critical roles within the state.


NYS Teacher Loan Forgiveness Program

The NYS Teacher Loan Forgiveness Program is specifically designed to attract teachers to low-income schools or educational service agencies. Eligible teachers can receive up to $5,000 annually for up to four years, for a maximum of $20,000 or the applicant's actual student loan indebtedness when eligibility is established, whichever is less.

To qualify, you must be employed full-time in an elementary or secondary school in the state. You must also teach in a subject shortage area or a hard-to-staff district in both the previous and current school years. Those interested can apply for this program through the New York State Higher Education Services Corporation.


Public Service Loan Forgiveness (PSLF) Program

New York’s new law expanded and simplified the federal Public Service Loan Forgiveness (PSLF) Program (PSLF) program for statewide public service employees, establishing a standard hourly threshold for full-time employment. After making 120 qualifying monthly payments under an approved repayment plan, you could have the remainder of your Direct Loans forgiven.

To be eligible, you must be a full-time employee of New York State and have made 120 qualifying payments while working for at least an average of 30 hours per week for a qualifying employer. The application process for this program involves submitting the PSLF form and employment certification.

Tips for Managing Student Loans

Student loan management is more than just a financial task — it's a skill that can significantly impact your financial trajectory. Learning how to manage your loans effectively can save you money and stress in the long run. Here are some tips to help you stay on top of your student loans.


Scholarships and Grants as Alternatives

Scholarships and grants are both avenues of financial aid that don't saddle you with debt. Scholarships are typically awarded for academic excellence or special talents, while grants are more often given based on financial need or specific life circumstances, such as being a first-generation college student.

The advantages of scholarships and grants are multifaceted. Not having to repay this financial aid means you start your post-college life without the weight of debt hanging over you. Both options can also significantly reduce the amount you may need to borrow, decreasing the financial risks associated with student loans.

Applying for scholarships and grants is essential to financing your education, especially in a state like New York where the cost of living can be high. Here's how to go about it.


Visit New York State Higher Education Services Corporation

Begin by exploring the New York State Higher Education Services Corporation (HESC) website to find state-specific scholarships and grants. This resource offers a wealth of information on financial aid opportunities exclusive to New York residents.


Consult your school’s financial aid office

Make an appointment with your school's financial aid office to discuss New York-specific scholarships and grants. They can guide you toward opportunities that match your academic achievements and career goals.


Use scholarship search engines

Utilize scholarship search engines like Fastweb or, but filter for New York-specific scholarships. These platforms can match you with multiple scholarships based on your profile, streamlining the search process.


Check local and community-based organizations

Investigate scholarships offered by local businesses, community organizations and religious groups in New York. These scholarships often have fewer applicants, increasing your chances of receiving an award.


Gather required documents

Compile all necessary documents, such as academic transcripts, financial need statements and letters of recommendation. Ensure you understand the specific requirements for each scholarship or grant to tailor your application accordingly.


Submit applications

After gathering all your materials, submit your applications in accordance with each scholarship or grant's guidelines. Keep a record of all submissions and set reminders for upcoming deadlines to ensure you maximize your opportunities for financial aid.

The Impact of Student Loans on Credit

Student loans are a double-edged sword when it comes to your credit score. On the one hand, they offer a chance to build a positive credit history; on the other, they come with the risk of severely damaging your credit if managed poorly. Your credit score is influenced by several factors, including the length of your credit history and your payment behavior, which are impacted by student loans.

The importance of making timely loan payments can't be overstated. Consistent, on-time payments help you avoid late fees and contribute positively to your credit history. This, in turn, can make you more attractive to future lenders and even result in lower interest rates on future loans.

The consequences of defaulting on a student loan are far-reaching. A default can trigger a significant drop in your credit score, making it challenging to secure future credit or loans. Worse yet, a default can lead to legal actions, including lawsuits and judgments, which can further damage your financial standing and remain on your credit report for an extended period.

Frequently Asked Questions (FAQs)

In the fast-paced world of New York, understanding the nuances of student loans is as essential as knowing the subway map. We compiled a list of the most commonly asked questions about student loans in the Empire State to help you navigate this landscape.

For federal student loans in New York, you must be a U.S. citizen or an eligible non-citizen with a valid Social Security number. Enrollment in an accredited college or university at least half-time is also required. Additionally, you must maintain satisfactory academic progress and not have any defaults on existing federal loans or owe refunds on federal grants.

In contrast, private student loans in New York have eligibility criteria set by individual lenders. A strong credit score is often essential, and you may need a cosigner if you lack a credit history. Some lenders may also require proof of New York residency, enrollment in a New York school or even specific academic achievements.

To apply for federal student loans, you'll need to complete the FAFSA. New York students may also be eligible for the Tuition Assistance Program (TAP), which requires a separate application through the HESC.

For private loans, the application process is lender-specific. You'll generally apply directly through the lender's website, where you'll need to provide financial and sometimes academic information. Some lenders may also require additional documentation like tax returns or pay stubs.

Subsidized loans are need-based and do not accrue interest while you're in school or during deferment periods. Meanwhile, unsubsidized loans accrue interest from the time they are disbursed, regardless of your enrollment status.

Interest on student loans is typically compounded on a daily or monthly basis. Federal loans usually have fixed interest rates set by Congress, while private loans can have either fixed or variable rates. Interest accrues on the principal amount, and if not paid, it can be capitalized, which can increase the overall loan balance.

Federal loans offer various repayment plans, including Standard, Graduated and Income-Driven Repayment options. Private loans generally offer less flexibility, with repayment terms set by the lender.

For federal loans, you may qualify for deferment or forbearance, which temporarily halts or reduces payments. However, interest may continue to accrue. Private loans have varying policies on one's inability to pay. Some lenders may offer temporary hardship deferment, but late fees and credit score penalties are common. It's crucial to contact your lender as soon as you anticipate difficulty in making payments.

Student loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness, can discharge some or all federal student loan debt under specific conditions. Each forgiveness program has its own set of eligibility criteria, including the type of loans that qualify and the repayment plans you must be in.

About Christopher Boston

Christopher Boston headshot

Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.

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