It used to be easy to get a student loan. Before around 2008, banks would practically throw money at students—with serious strings attached, of course. But pretty much any student could get a private loan from a bank to further their education, which made college more accessible to all—despite putting graduates under heavy debt burdens after graduation.

But the economic recession that started in late 2007 with mortgage-backed securities didn’t just affect the housing market—it affected institutions that made many different types of loans, including student loans. Today, banks look more carefully at anyone applying for a loan, because they want to be sure they’ll get their money back—with interest. And not every student is a good investment.

If you are having trouble getting a private student loan to help pay for college, here are a few reasons why this might be the case.

If you’re a traditional student with no credit history or you have bad credit, you may need someone to cosign on your loan. If you don’t have a parent with a decent credit history to help back you up when you sign for a loan, you may have more trouble getting loans than students who have parents who can offer this type of support.

You have no credit history

Many college students are just graduating from high school—and they haven’t had time to build up any kind of credit history. If you’re trying to sign up for a loan on your own without a parent or guardian to co-sign, you may have a difficult time convincing banks to lend to you.

Your credit is bad

Then again, some students have plenty of time to build up a credit history—and tear it down. If you already have significant debt or a history of defaulting on loans, you are a particularly bad bet to banks. As with those who have no credit history, you may need a cosigner with great credit if you want to get a student loan.

Your cosigner’s credit is bad

If you’re a traditional student with no credit history or have gotten yourself into financial trouble in the past, you may need a cosigner to get a student loan. But what happens when your cosigner also has bad credit? If your parents have had a lot of financial struggles, have had a hard time paying off loans in the past, or have a high debt-to-income ratio already, getting their name on your loan may not help you. 

You’re going to a school with a low graduation rate

Lenders don’t just look at you when they’re deciding whether to loan students tuition money. They also look at your school. If your school has a relatively low graduation rate or a relatively low rate of high-earning alumni, the bank may see you as more of a lending risk than it would someone who’s going to a school with high-earning alumni. If this is your case, you may have a tough time getting the loan you want at the rates you want.

You’re getting the wrong kind of degree

To a bank, a future doctor is a better loan risk than a future English teacher. If you’re getting a degree that doesn’t lead to a high-paying career—or even worse, if your career tends to be underpaid compared to other careers in the US—it could affect the loans you get and whether a bank will consider you for a private loan.

In this economy, it’s tougher now than ever to get a loan for your education. If you’re having trouble getting a private loan, it may be because of any of these reasons—and when you finally do get a private loan, you may be stuck with a high interest rate, variable rates, and other terms that make that loan hard to live with. If it’s possible, look over your credit rating and see if there’s anything you can contest—this may help you improve your chances for getting a loan over time.

Sources:

Bankrate.com: Poor Credit History Can Affect Getting a Student Loan
CBS Money: Why You Can’t Get a Loan