Applying for Emergency Student Loans: What You Should Know

by Jalen & Sarah Bromley

Nobody plans to end up with next to no money in their account, and it’s hard to imagine a more stressful situation. But while it’s easier said than done, it’s crucial to keep calm if you’ve found yourself in this scenario — the last thing you want to do is apply for a fake loan or program promising riches that will only leave you worse off. If you’re considering applying for emergency student loans, clue yourself up first.

This guide will run through everything you need to know about emergency student loans, including how to apply and possible alternatives. 

What are emergency student loans?

An emergency student loan is a type of loan many colleges give to students experiencing financial setbacks. They’re designed to cover expenses like food or accommodation, and typically can’t be used for tuition fees. 

Emergency student loans generally consist of relatively small amounts compared to other loan types. For instance, the University of Michigan lends its students up to $500. 

This may seem limiting, but the good news is that emergency student loans are almost always interest-free, meaning you won’t have to pay back more than you borrowed. As a result, the typical Dave-Ramsey-style advice to avoid debt like the plague doesn’t apply. 

Although you should always take borrowing seriously and consider how you will repay the money, an emergency student loan won’t leave you destitute due to accumulated interest.

Emergency student loans vs emergency loans

It’s important to note that emergency student loans aren’t the same as standard emergency loans. This is a term often used to describe payday loans or personal loans, which private companies — not universities — provide. 

We’ll cover these types of loans as alternatives to emergency student loans, which some may want to consider. However, they’re not the primary focus of this article. 

How to find emergency student loans

Since universities themselves offer emergency student loans, you won’t need to shop around to find your provider. 

First, contact your university’s financial aid office and explain your financial situation. Even if they don’t offer an emergency student loan or you’re not eligible for their program, they may be able to point you toward an alternative solution. 

You may also be able to find information online. However, it’s important to ensure you verify that you’re talking to a genuine representative of your college and not a scam pretending to be them.

How to apply for emergency student loans

If you think an emergency student loan is the right choice for your circumstances, here’s how to kickstart the process.

1. Check you’re eligible

There’s no point in getting excited about the prospect of taking out a loan until you’re sure you’re eligible.

Most universities won’t give out an emergency student loan to any student who asks for one. Instead, you will have to meet specific criteria and be able to prove your eligibility. 

The primary criterion is financial need — you must be able to prove that you’re facing a genuine financial hardship and have no other option but to receive a loan from your college. 

In some cases, there could be restrictions on whether you’re a part-time vs full-time student, a graduate or undergraduate student, and other details. 

2. Gather the relevant documents

As mentioned, you’ll have to prove that you meet your college’s eligibility criteria, which means gathering the right documentation. For instance, if you need an emergency student loan because of a medical emergency, you may need to show a note from the doctor verifying the medical event was real.

As well as proof of your emergency, you may need to prove your identity by providing your student identification card and enrollment letter to the university.

3. Decide how much you need

Just because you can take out a loan for up to $500, it doesn’t mean that you should ask for this much if you don’t need it. Remember — you will have to pay this money back, so you should borrow as little as you can.

However, there’s no need to ask for less in the hopes that it will boost your chance of acceptance. Your university will assess your application based on whether you meet the criteria, not on how much money you need.

4. Fill in the application

Different universities may have different application processes — some may require you to fill out a physical application and hand it into the financial aid office, while others have an online application form.

Either way, it should be relatively straightforward if you have the right information and documents at the ready. 

However, be sure to read it through multiple times before submitting it and ask for clarification if there’s anything you’re unsure about. One of the most common reasons for application rejections is making basic errors.

5. Receive the money

The financial aid office will then review your application to check you meet the criteria. If you’ve been successful, they should pay you the money promptly. The payment method varies between colleges, but is often a direct bank account transfer.

You may need to pay a small service charge of $10-$30 in some cases.

6. Sort out repayment 

Once you have taken out an emergency student loan, your top priority is handling your loan repayment.

Often, you need to repay an emergency student loan relatively within 30 to 90 days. Although we’ve placed this as the last step in the “how to apply” framework, you absolutely shouldn’t wait until you’ve already received your money to check how long you have to pay the money back. Ideally, you should work out how you’ll get the money beforehand — that may involve budgeting.

Even though most emergency student loans don’t charge interest, you may still face fees or other penalties for failing to repay, such as losing the option to receive another loan from your college in the future or a hold on your academic records. 

Alternatives to emergency student loans

Whether you’re not eligible for an emergency student loan or you want to consider all your options, let’s touch on a few alternatives to emergency student loans.

Financial aid

If you have encountered a temporary emergency such as a medical accident or running out of cash, you’re probably not going to be able to obtain a scholarship to cover the expenses within a few weeks.

But if your financial circumstances have permanently changed, you may be eligible for financial aid from your university. For instance, if you previously relied on a family member who has now died or a job you have now lost, your new circumstances may mean you’re within the income thresholds for receiving a bursary.

This is something worth discussing with the financial aid office.

Private loans

We mentioned earlier that emergency student loans differ from standard emergency loans. Private emergency loans can come in a few forms.

The most common type of “emergency loans” are personal loans, which involve a lender giving you a lump sum that you can put toward various uses. Many loan companies give borrowers four-figure sums — the average in 2023 was $11,548. However, unlike emergency student loans, you’ll be charged a hefty interest rate. The average APR for a personal loan is 11.48%.

The exact loan value and interest rate the lender will offer you depends on how creditworthy you appear, based primarily on your credit score and history. This is a factor that emergency student loans don’t take into consideration, so it could be a hurdle if you haven’t taken out a lending product before (or if you have but missed payments).

Another emergency loan type you may come across is a payday loan. These are typically easier to obtain for people with poor credit, but they have extortionate interest rates to compensate, so they are best avoided.

Federal loans

In some cases, you could consider federal student loans. For this to be an option, you’ll need to meet the eligibility criteria, fill out a Federal Application for Federal Student Loans (FAFSA), and receive an offer.

You’ll need to meet the basic eligibility criteria for federal aid, which focuses on demonstrating financial need and studying at an eligible institution. The amount you’ll be able to borrow depends on your financial need, based on your dependency status and income (or the income of your spouse or parents if relevant). 

The maximum amount an undergraduate can borrow is $12,500 per year, while graduate or professional students can borrow up to $20,500.

Credit cards

You may also consider credit cards. If you already have access to a credit card, it can be tempting to use it for an emergency expense. However, this is generally a bad idea due to their high interest rates. The average credit card in the US has an APR of 24.61% — that’s significantly above even private loans. 

If you find yourself paying the minimum payment toward your credit card each month (or anything below the full payment), you can end up in a “debt cycle.” In other words, all your disposable income goes toward your credit card payments, but you can never pay it in full as the amount you owe keeps increasing, and you may have to take on even more debt.

Ways to avoid emergency student loans

If you’re already at the point where you’re in an emergency and need cash, the last thing you want is someone preaching about what you should have done to avoid the situation. But once you’ve gone through your emergency, it’s the perfect opportunity to get your finances to avoid facing the same problem again.

Building an emergency fund is one of the most important steps you can take. This is a pot of money you save and set aside designed to tide you over for unforeseen circumstances. It would ideally be enough to cover your expenses for a few months, but if you can only put aside a few hundred dollars, that’s a lot better than nothing.

Considering 49% of US adults can’t afford to cover a $1,000 emergency, you’re not alone if you haven’t started. But on the other hand, even saving $100 a month for the year would put you ahead of the majority of the population!


Don’t click away until you get all the details! Below, we’ve answered some common queries.

How long does it take to get an emergency student loan?

This will vary depending on your college. However, speed is often prioritized since these loans are designed for emergencies. Many colleges will transfer the money within one or two days after you have been approved for the loan. However, they may need a few days to review and approve the loan first.

Can you get a student loan last minute?

You must apply for federal loans at any time between October 1 and June 30, but it will take a few weeks to get approved, and there are usually only two disbursement dates in an academic year. However, if you contact your school’s financial aid office, they may be able to help.

Do emergency loans hurt credit?

Emergency loans from private lenders can have a negative impact on your credit score, although the fact the money is used for an emergency and not another purpose isn’t detrimental. However, emergency student loans from universities don’t typically appear on your credit history.

From crisis to confidence

College can be a cash-strapped time for many students, so if you urgently need money after being faced with unforeseen circumstances, you’re not alone. Emergency student loans are an ideal lifeline for many students. Offered by colleges themselves and not predatory lenders, they often provide small sums interest-free based solely on financial need and not credit score.

Whether you end up applying for an emergency student loan or opting for an alternative, getting your finances in order as best you can is essential for avoiding another emergency. Frugal Student covers all bases with our financial advice tailored to students, from student housing to meal prep and budgeting.

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