Does Your School Choice Matter When Applying for a Student Loan?

Yes, in some ways. The school must be accredited to be eligible to allow student's to use government loans at the school. Some colleges choose not to be accredited, for a variety of reasons. Many of them are religious in nature, and don't believe it's proper for a religious institution to submit to being approved by an accrediting organization. Bob Jones University in South Carolina is probably the most famous college that isn't accredited, but there are some others who refuse accreditation.

And some accredited schools have lost their accreditation, for a variety of reasons, and you can't use government grants and loans there until the school is once again certified as up to par. This is an unusual situation, but it does occur from time to time. There are a handful of schools that, even though they are fully accredited, refuse to participate in government student aid as a matter of principle and independence. Two famous ones are Hillsdale College in Michigan, and Grove City College in Pennsylvania.

School choice can also be a factor in how much and what kinds of financial aid you get. Federal, and much state, student aid is based on the difference between what money you and your parents have, and how much your chosen college will cost to attend. Pell grants are one example of financial aid that can vary depending on the cost of the college you want to attend.