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I live in the US and I am a somewhat mature full-time graduate student. I have gone back to grad school after having spent some years working and I have children and a mortgage. My school has a policy that certain students need to apply for a FAFSA student loan and I am wondering if applying for that loan could affect my existing mortgage?

I wouldn't think applying for a new loan would affect an existing mortgage, as long as we are keeping up with payments. But, I would like to be sure.

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  • Just for clarity, when you say "existing mortgage", you're referring to a first mortgage, right? The answer for a home equity line of credit (HELOC) is a little different. You sometimes get a HELOC at the same time you get a first mortgage and people sometimes call both their "existing mortgage"
    – Justin Cave
    Commented May 11, 2023 at 15:34
  • @JustinCave yes, by 'existing mortgage' I am referring to a first mortgage for the home we are living in.
    – Time4Tea
    Commented May 11, 2023 at 16:42

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The FAFSA is the Free Application for Federal Student Aid (FAFSA).

The form is used to look at your school expenses, income, and savings and determine how much you can afford to contribute to your college expenses.

Many schools require you to complete the form to be eligible for scholarships and grants even if the source of the funds isn't from the federal government.

Completing the form has no impact on your credit score. The government doesn't do a credit check. Students can even get financial aid with no credit history.

If you then apply for private student loans, there will be a credit check, which can impact your score, but not any differently than any other time you apply for a loan.

I wouldn't think applying for a new loan would affect an existing mortgage, as long as we are keeping up with payments. But, I would like to be sure.

If you have a mortgage or car loan, then a decrease in your credit score will not impact your current loans. A low score will hurt you if you want to refinance or get another loan.

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  • Thanks for your answer, this is very helpful. I hadn't realized that applying for a FAFSA loan wouldn't affect my credit score, so it's good to know that I can apply for it without any concern that it could affect current or future loans.
    – Time4Tea
    Commented May 11, 2023 at 14:05
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    There isn't a FAFSA loan, the form is used to qualify for aid. Aid is grants, scholarships, work study programs in addition to federal loans. If you want a non-federal loan there might be additional paperwork that needs to be completed. Applying for a loan will impact your score.
    – mhoran_psprep
    Commented May 11, 2023 at 14:09
  • ah, ok. Thanks for clarifying. Perhaps I had a misconception about what FAFSA is then. I will look into it further.
    – Time4Tea
    Commented May 11, 2023 at 16:43

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