Understanding the Parent Plus Loan Forgiveness Program

Parent PLUS loan forgiveness provides financial relief to parents who borrowed money to cover the cost of their children’s college or career school. It isn’t always a quick fix, but there are certain federal and private programs that might offer the financial assistance needed to help them get on track.

To receive federal relief for Parent PLUS loans, parent borrowers have a few options.

They can consolidate the loan in order to enroll in an Income-Contingent Repayment plan after 25 years, pursue Public Service Loan Forgiveness after 10 years, or choose from a number of private student loan assistance programs or refinancing options.

Keep reading to learn more about what the available student loan forgiveness possibilities are for Parent PLUS loans.

Will Parent Plus Loans Be Included in Student Loan Forgiveness?

Parent PLUS loans are eligible for several of the same student loan forgiveness programs as federal student loans for students, including:

•   Borrower Defense Loan Discharge

•   Total and Permanent Disability (TPD) Discharge

•   Public Service Loan Forgiveness (PSLF)

That said, Parent PLUS loans generally have fewer repayment options in the first place and the eligibility requirements for these forgiveness programs can be strict and may require borrowers to consolidate their PLUS loan, such as with PSLF. This can make it tricky for borrowers to navigate how to use these federal relief programs to their advantage.

Refinancing is another option for Parent PLUS loan borrowers — applying for a new private student loan with an, ideally, lower interest rate. That said, some lenders offer less flexibility for repayment and the fine print can be lengthy, so there’s an inherent risk associated with refinancing Parent PLUS loans. It’s also worth noting that refinancing a PLUS loan will eliminate it from any federal repayment plans or forgiveness options.

Recommended: What Is a Parent PLUS Loan?

Parent Student Loan Forgiveness Program

When it comes to student loan forgiveness, the programs aren’t just available for the students. Parents who are on the hook for student loan debt can also qualify for student loan forgiveness.

As previously mentioned, a Parent PLUS loan may be eligible for Parent Student Loan Forgiveness through two specific federal programs:

•   Income-Contingent Repayment

•   The Public Service Loan Forgiveness (PSLF) Program

There are also a few private student loan forgiveness options, which we’ll get into below.

Income-Contingent Repayment (ICR)

An Income-Contingent Repayment plan, or ICR plan, is the only income-driven repayment plan that’s available for Parent PLUS borrowers. In order to qualify, parent borrowers must first consolidate their loans into a Direct Consolidation Loan, then repay that loan under the ICR plan.

•   A Parent PLUS loan that’s included in a Direct Consolidation Loan could be eligible for Income-Contingent Repayment, but only if the borrower entered their repayment period on or after July 1, 2006.

•   A Parent PLUS loan that’s included in the Federal Direct Loan Program or the Federal Family Education Loan Program (FFELP) is also eligible for ICR if it’s included in the Federal Direct Consolidation Loan.

ICR determines a borrower’s monthly payment based on 20% of their discretionary income or the amount by which their AGI exceeds 100% of the poverty line. After a 25-year repayment term, or 300 payments, the remaining loan balance will be forgiven.

Typically, the IRS considers canceled debt a form of taxable income, but the American Rescue Plan Act of 2021 made all student loan forgiveness tax-free through 2025.

Public Service Loan Forgiveness (PSLF)

Borrowers with Parent PLUS loans may be eligible for Public Service Loan Forgiveness Program, but in order to pursue that option must first consolidate the Parent PLUS loan into a Direct Consolidation Loan.

Then, after they’ve made 120 qualifying payments (ten year’s worth), borrowers become eligible for the Public Service Loan Forgiveness Program (PSLF). The parent borrower (not the student) must be employed full-time in a qualifying public service job. PSLF also has strict requirements such as certifying employment so it’s important to follow instructions closely if pursuing this option.

The Temporary Expanded Public Service Loan Forgiveness (TEPSLF) is another option for Parent PLUS borrowers if some or all of their 120 qualifying payments were made under either a graduated repayment plan or an extended repayment plan. The catch here is that the last year of their payments must have been at least as much as they would if they had paid under an ICR plan.

Refinance Parent Plus Loans

Refinancing a Parent PLUS loan is another option that could provide some financial relief.

For borrowers who don’t qualify for any of the loan forgiveness options above, it may be possible to lower their monthly payments by refinancing Parent PLUS student loans with a private lender.

In doing so, you’ll lose the government benefits associated with your federal loans, as briefly mentioned above, such as:

•   Student loan forgiveness

•   Forbearance options or options to defer your student loans

•   Choice of repayment options

Refinancing a Parent PLUS loan into the dependent’s name is another option, which some borrowers opt for once their child has graduated and started working. Not all loan servicers are willing to offer this type of refinancing option, though.

Transfer Parent Plus Student Loan to Student

Transferring Parent PLUS loans to a student can be complicated. There isn’t a federal loan program available that will conduct this exchange, and, as mentioned above, some private lenders won’t offer this option.

That said, some private lenders, like SoFi, allow dependents to take out a refinanced student loan and use it to pay off the PLUS loan of their parent.

Alternatives to Student Loan Forgiveness Parent Plus

When it comes to Parent PLUS loans, there are a few ways to get out of student loan debt legally, including the scenarios outlined below.

Student Loan Forgiveness Death of Parent

Federal student loans qualify for loan discharge when the borrower passes away. In the case of Parent PLUS loans, they are also discharged if the student who received the borrowed funds passes away.

In order to qualify for federal loan discharge due to death, borrowers must provide a copy of a death certificate to either the U.S. Department of Education or the loan servicer.

Recommended: Can Student Loans Be Discharged?

State Parent PLUS Student Loan Forgiveness Programs

Many individual states offer some sort of student loan repayment assistance or student loan forgiveness programs for Parent PLUS loan borrowers.

For an overview of options available in different states, you can take a look at The College Investor’s State-by-State Guide to Student Loan Forgiveness . For information on student loan and aid available take a look at the SoFi guide on state-by-state student aid available for borrowers.

Disability

In the event of the borrower becoming totally and permanently disabled, a Parent PLUS loan may be discharged. To qualify for a Total and Permanent Disability (TPD) discharge , borrowers must complete and submit a TPD discharge application, as well as documentation showing that they meet the requirements for being considered totally and permanently disabled. Note that in order to qualify for TPD, the parent borrower must be considered disabled. This type of forgiveness does not apply to Parent PLUS loans in the event that the student becomes disabled.

Bankruptcy

If a borrower can demonstrate undue financial hardship upon repaying the student loan, they might be able to discharge their Parent PLUS loan. Note having student loans discharged in bankruptcy is extremely rare. Proving “undue hardship” varies depending on the court that’s granting it, but most rulings abide by the Brunner test, which requires the debtor to meet all three of these criteria in order to discharge the student loan:

•   Poverty – Maintaining a minimal standard of living for the borrower and their dependents is deemed impossible if they’re forced to repay their student loans.

•   Persistence – The borrower’s current financial situation will likely continue for the majority of the repayment period.

•   Good faith – The borrower has made a “good faith” effort to repay their student loans.

Closed School Discharge

For parent borrowers whose children attended a school that closed while they were enrolled or who withdrew from the school during a “lookback period” of 120 days before its closure, a Closed School Discharge is another available form of student loan forgiveness.

In some circumstances, the government may extend the lookback period even further. For example, The Department of Education has changed the lookback period to 180 days for loans that were issued after July 1, 2020.

Borrower Defense

Borrower Defense Loan Discharge is available to Parent PLUS borrowers whose children were misled by their college or university or whose college or university engaged in certain forms of misconduct or violation of state laws.

To make a case for borrower defense, the Parent PLUS borrower must be able to demonstrate that their school violated a state law directly related to their federal student loan.

Explore Private Student Loan Options for Parents

Banks, credit unions, state loan agencies and other lenders typically offer private student loans for parents who want to help their children pay for college and refinancing options for parents and students.

Refinancing options will vary by lenders and some may be willing to refinance a Parent PLUS loan into a private refinanced loan in the student’s name. In addition to competitive interest rates and member benefits, SoFi does allow students to take over their parent’s loan during the refinancing process. Interest rates and terms may vary based on individual criteria such as income, credit score, and history.

If you decide refinancing a Parent PLUS loan makes sense for you, SoFi makes it simple. The application process is entirely online and SoFi offers flexible repayment options to help you land a loan that fits your budget. You can find your rate in a few minutes and checking if you prequalify won’t affect your credit score.*

The Takeaway

Parent PLUS Loan forgiveness offers financial relief to parents who borrowed money to help their child pay for college.

To receive federal relief for Parent PLUS loans, parent borrowers can enroll in an Income-Contingent Repayment plan, pursue Public Service Loan Forgiveness, transfer their student loan to another student, take advantage of a state Parent PLUS student loan forgiveness program, or opt for private student loan assistance or refinancing.

Learn more about refinancing a Parent PLUS loan with SoFi.


*Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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Guide to Dental Loans

Finding out you need dental work can be scary — and scary expensive. Still, the pain and the price could get even worse if you put off getting care. And sometimes delaying just isn’t an option.

If you don’t have enough money stashed away in your emergency fund, and your insurance won’t cover all your costs, you may want to chew on the pros and cons of taking out a dental loan.

What Are Dental Loans?

Medical financing loans are personal loans that are used to pay for a variety of medical expenses, including dental work and related expenses.

Whether you’re feeling overwhelmed by the upfront cost of a root canal or crown, or you expect to pay a substantial amount over time for braces, aligners, or implants, a dental loan can be a quick and convenient way to get the financing you need.

With a dental loan, you can borrow money to pay for your care, then make monthly payments until the loan balance is paid off.

How Do Dental Loans Work?

Dental loans are usually unsecured personal loans, which means you don’t have to put up collateral to secure the loan. Approval for a loan for dental work will be based on your creditworthiness.

If you qualify, you’ll receive a lump sum of money that’s to be repaid in monthly installments consisting of principal and interest. Since dental loans typically have fixed interest rates, your payments should be the same amount each month throughout the repayment period.

What Can Dental Loans Be Used For?

You typically can use a personal loan to pay for just about anything as long as it’s legal and within the terms of your loan agreement. For example, you can use a personal loan to pay for wedding expenses, home improvements, or legal fees.

Costs related to your dental care are included in common uses for personal loans. These might include treatment — even for expensive elective or cosmetic procedures that may not be covered completely or at all by dental insurance, over-the-counter or prescription medications you might require, transportation. You can even use the funds for the milkshake and soup you might need after your procedure.

Here are approximate costs for some common procedures that could be paid for with a dental loan:

Porcelain Crown

The cost of a crown can vary based on the materials used to make it, as well as the size, shape, and location of the tooth that’s being replaced. Costs for an all-porcelain crown can range from $800 to $3,000. Dental insurance may cover some of that expense, unless the crown is strictly for cosmetic purposes.

Whitening

A basic teeth cleaning may be covered by dental insurance as part of your annual exam. But an in-office teeth bleaching (which can cost $300 to $500 or more) or a laser whitening (which averages $1,000), likely won’t be covered by insurance.

Root Canal

The cost of a root canal could range from about $700 to $1,800 if you don’t have dental insurance. The cost can depend on several factors, including which tooth is being worked on and if the work is done by a specialist. Insurance may take the cost down to between $200 and $1,500.

Aligners

Teeth aligners can be pretty pricey no matter which type you buy, but if you go with an in-office treatment, you can expect to pay between $2,500 and $8,000. At-home brands range from about $1,200 to $3,300. Your insurance provider may pay for some of those costs, but you should check your coverage before ordering.

Veneers

Veneers can range from $470 to $2,000 per tooth, depending on the type and how much prep work is involved. The cost generally is not covered by dental insurance.

Typical Dental Loan Application Process

Your dentist may offer an in-house financing plan to help with costs — especially if he or she specializes in cosmetic procedures. Or the practice may partner with a lender who provides these types of loans. You aren’t obligated to use your dentist’s financing plan, but you may want to check out what the practice is offering. You also can go online to compare dental loan offers from traditional and online lenders.

Compare Offers: Choosing the Right Loan

When you start shopping for loans for dental work, you can go to individual lenders’ websites to see what they have to offer or use a comparison site to conveniently check out multiple lenders.

Getting prequalified with a few different lenders can help you get the clearest idea of what’s available and what’s best for your needs. Lenders typically use a soft credit pull during the prequalification process, so it won’t affect your credit score.

Here are a few things to watch for as you shop for financing:

Annual Percentage Rate

A loan’s annual percentage rate (APR) tells you the amount of interest you can expect to pay on your loan over the course of one year, including any fees or charges you might incur. Because it gives you a complete picture of the cost of the loan (as opposed to just looking at the interest rate), the APR can be a useful tool for comparing various loan offers.

Recommended: APR vs. Interest Rate

Fees

Fees can add up quickly, and they can add to the cost of your loan. Some common fees to look out for could include an application fee, origination fee, late payment fee, returned payment fee, and a prepayment penalty. Low-fee or fee-free loans may save you money over the life of the loan.

Loan Amounts

Some lenders may have loan minimums that require you to borrow more than you need. Before you go loan shopping, you may want to get dental procedure cost estimates to get an idea of how much you’ll have to borrow. Then you can look for lenders who are willing to lend that amount.

Loan Terms

Another important factor to consider is the loan term, or how long you’ll be given to repay the money you’ve borrowed. Of course, you’ll want to find a loan term that feels comfortable (a longer-term can equal lower payments). But a longer-term also could increase the amount you pay in interest over the life of the loan. You may want to think about how the loan length could affect your future financial goals.

Eligibility Requirements

Before you settle on a particular personal loan for dental work, you may want to check out the lender’s eligibility requirements. In the process of checking your personal loan rate, most sites will review your credit scores, credit history, income, and other personal financial information to determine whether you qualify for a particular interest rate or other loan terms.

Many lenders will accept a fair credit score (a FICO® Score of 580 to 669 is considered fair), but a good FICO Score (670 to 739) could qualify you for a more favorable interest rate and other terms. If you have a poor score (lower than 580), lenders may consider you to be a high lending risk, which could affect your eligibility. You may be able to find a loan, but the interest rate will likely be more expensive.

Approval and Funding Timeline

If you can’t get your treatment until you can pay for it — and you need it soon — a quick approval time and rapid funding also could be an important considerations. One of the major pluses of using an online lender can be the convenience and fast application time. If you have all your information ready, it can be easy to apply using an online form. And if you qualify, the money generally can be available within a few days.

Customer Service

Does the lender have a reputation for good customer service? You may want to check into how various lenders deal with consumer questions and problems. At the same time, you can see if there are any perks to building a relationship with a lender that might benefit you in the future.

Applying for a Dental Loan

If you find a lender and loan terms you like, and you’re ready to apply, your next step will be to complete a formal application. You can expect to be asked to verify your identity, income, and current address, and it can make things easier if you gather up the necessary documents ahead of time. You’ll probably need your driver’s license, Social Security number, recent pay stubs and/or bank statements, and a utility bill or some other proof of address.

Once you apply, most lenders will do a hard credit check, which may cause your credit score to drop by a few points temporarily. The lender will evaluate your ability to repay the loan and, if you qualify, your loan will be funded.

Pros and Cons of Dental Loans

Whether you need money for a one-time emergency procedure or for a series of treatments that could add up to a big expense, a dental loan may be an option worth considering. Here are some pros and cons that could help you decide if a personal loan makes sense for your situation:

Pros

Convenient Online Comparison

Applying for a personal loan online can be convenient and quick. Many lenders offer personal loans that can be used for dental treatment, so you can shop for the loan amount and terms that best suit your needs.You may be able to get your approval within a few hours (maybe even a few minutes) and you could receive your money within a few days.

Competitive Terms

If you have a solid credit history, a stable income, and fair or better credit scores, you may qualify for a competitive interest rate and a repayment period you feel comfortable with. (The interest rate on a dental loan is typically lower than the interest rate on a credit card.)

Fixed Payments

With a dental loan, borrowers typically receive a lump sum of money that is repaid in fixed monthly payments. This can make it easier to budget and manage your payments.

Cons

Fees and Penalties

Some dental treatment loans come with fees and penalties that can drive up the overall cost of borrowing. You may be able to keep your costs down, though, by finding a low- or no-fee loan.

Alternatives May Cost Less

If you can qualify for a credit card with a low or 0% promotional rate for purchases, it may be a less expensive way to borrow money — at least for a while. Zero-interest credit cards charge no interest during an introductory period, which typically lasts from six to 18 months. Paying the balance in full within the promotional period is essential to making the most of an offer like this.

Fixed Payments

Having a fixed monthly payment can make budgeting easier, but it doesn’t provide flexibility if you can’t make that payment for some reason. A different financing option, such as a credit card, might offer more adaptable minimum monthly payments.

Pros and Cons of Dental Loans

Pros Cons
Easy to compare lenders online. Some dental loans have fees and penalties that can increase the overall cost.
Terms are competitive and interest rates are generally lower than on credit cards. Alternatives like credit cards with a 0% interest introductory rate may be less expensive.
Fixed monthly payments can make it easy to budget for the expense. Fixed payments don’t allow for budget shortfalls.

Alternatives to Personal Loans

If you can’t afford the dental work you need, there are options besides dental loans that you might want to check out. A few to consider include:

Credit Cards

If you already have a low-interest credit card, you may want to compare the interest you’d pay if you used that card vs. the cost of a dental loan. Or you might want to consider the pros and cons of applying for a low or 0% introductory-rate credit card — if you think you can pay off the balance during the designated promotional period. If you end up using a high percentage of your available credit, however, your credit score could be negatively affected.

Dental Office Financing

Your dentist may offer some type of in-house financing to patients who can’t afford the treatments they want or need. The practice might partner with a lender that offers loans for dental procedures, for example, or the dental office might suggest a medical credit card with a low or 0% introductory rate. These offers may be worth reviewing and comparing to similar options, as long as you’re clear on all the repayment terms.

Grants

There are grant programs aimed at helping seniors, adults and children living in low-income households, and those who have special needs. The Dental Lifeline Network is a nonprofit organization that provides access to dental care for people who can’t afford it. Some dentists also may offer partial grants to attract new patients who need extensive and expensive treatment.

Explore Personal and Dental Loans with SoFi

A dental loan can be a quick and convenient solution if you need cash to pay for an unexpected dental procedure or an elective treatment you’ve been thinking about for a while (like braces, aligners or implants). Whether you’re considering an expensive cosmetic procedure or you need a crown or root canal ASAP, SoFi may offer a personal loan rate that works for your unique financial situation.

There are no fees with SoFi Personal Loans, and borrowers have access to customer support seven days a week. The application can be completed online, and you can check your rate in just one minute.

Take the pain out of dental costs and check your rates on a personal loan from SoFi

FAQ

What credit score do you need for dental implant loans?

Many lenders will offer a dental loan to a borrower with a fair credit score. (A FICO Score of 580 to 669 is considered fair). But a good FICO Score (670 to 739) could improve your interest rate and other terms. If you have a poor score (lower than 580), lenders may consider you to be a higher risk, which could affect your eligibility.

Can you get your teeth fixed with no money?

You may be able to find a research clinic or university dental program that provides free services to volunteer patients who need care. And some dental practices may occasionally offer free care to low-income patients. There are also grants that could help cover costs.

Can you put dental work on a credit card?

Yes, you can use a regular credit card or a medical credit card to pay for dental work. But if you come close to using up the balance on your card, it could affect your credit utilization ratio, which can have a negative impact on your credit scores.


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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4 Types of Wills Explained: Which One Is Right for You?

Not all wills are alike; there are actually four main kinds and one of them is right for you. Sure, writing a will can be an easy task to put off until “someday.” But what if the worst were to happen before “someday?” That could mean a complicated and emotionally draining legal process for your loved ones. Creating a will not only can provide peace of mind for your loved ones after you die, but it can also provide peace of mind for you right now.

The simple definition of a will is a document that states your final wishes. This alone was sufficient a century ago, when many people had limited property to pass down. But in the modern era, when “property” encompasses everything from the contents of your long-forgotten storage unit to the crypto you decided to buy on a whim, a simple will may not encompass your complex life.

Not only that, but a will is a document that only takes effect after you die. But what if you were medically unable to make decisions? Modern end-of-life documents encompass your wishes if you were medically or otherwise unable to make decisions on your own. Among these documents is one that also has the world “will” in its name.

4 Kinds of Wills

As you begin estate planning, you’ll likely come across four common types of wills. These are:

•   A simple will

•   A joint will

•   A testamentary trust will

•   A living will

Let’s look at each type of will more closely.

What Is a Simple Will?

Like the name, a simple will may be the type of will that pops into your mind when you hear the word “will.” This will can:

•   State how you want your property bequeathed upon death

•   Provide guardianship specifications for minors

Upon death, a simple will is likely to go through a legal process known as probate to divide assets. Sometimes, in the case of high-net worth individuals, probate can be expensive. (For those with complex situations and a positive net worth, a trust can help handle those what-ifs. It can transfer assets out of your estate and into the trust, which can be advantageous in terms of taxes.) But in many situations, a simple will can provide peace of mind for people in good health. Later, these individuals may want to take on more complex estate planning, but a will provides a good foundation when it comes to making sure guardians are named and property is divided according to your wishes.

A simple will can be created through online templates, and the cost can be zero dollars to several hundred dollars. More expensive online options may come with support from an attorney who can help answer simple questions. Once created, a will then needs to be made legal according to state laws. This may include signing the will in front of witnesses. You may also want to have it notarized. Having a hard copy of the will, as well as people who know how to access it in case of your death, can ensure the will is found in a timely manner if you were to die.

What Is a Joint Will?

A joint functions in much the same way as a simple will, except it is a will created by two people, usually who are married to each other. It merges their wishes into a single legal document. In many cases, this kind of will dictates that property will be left entirely to the surviving partner. Here’s the catch, though: Upon death, property will be distributed in the manner dictated by the will — the surviving person does not have the ability or authority to make changes to what the will says once the initial spouse has died.

This can sound streamlined, especially if couples were planning to leave everything to each other anyway. But this type of will can cause headaches. For example, if the surviving spouse has more children or gets remarried, it can be almost impossible to provide for additional people not named in the initial, joint will. There could be problems even if the surviving spouse does not remarry. For example, if the marital home is considered an asset to be given to the couple’s children upon the death of both of the will’s creators, it may be impossible for the surviving spouse to sell a home to downsize.

One alternative that may suit married couples is to create two individual wills. This may provide a greater degree of flexibility and better achieve the desired effect without ruling out all of life’s what-ifs.

What Is a Testamentary Trust Will?

A testamentary trust will is usually part of big-picture estate planning. It is a document that creates a trust that goes into effect when you die. This trust can outline how certain types of property will be divided. A testamentary trust can have certain stipulations (for example, someone only inherits X piece of property when they reach Y age). This can also be used for people with minors or dependents to help ensure that wishes are followed.

What’s more, a testamentary trust can also help provide for pets. Because a pet can’t own property, naming your “fur baby” within a will can set up a legal headache. But a testamentary trust can ensure that your pet will be provided for according to your wishes.

It’s worth noting that a testamentary trust will go through the probate process, and it may not have the same tax benefits for recipients as other types of trusts. Weighing the pros and cons of different trust options can be helpful before settling on the best one for your situation.

What Is a Living Will?

This is a hard topic to think about, but what if you were in an accident and were knocked unconscious? What if you were undergoing treatment for a serious medical condition and couldn’t fully grasp the options offered to you? There’s a way to put a trusted relative or friend in the decision-making role. A living will, which is also known as an advance directive, specifies your wishes if you were medically incapacitated or unable to make or communicate decisions about your medical care. It also stipulates who your healthcare proxy, also known as a medical power of attorney, would be to make medical decisions on your behalf.

If you are creating a living, you may also want to create a power of attorney document as well. This designates a person, who may or may not be the same person as your healthcare proxy, who has the right to make financial decisions on your behalf. Having a living will can cover unexpected situations that may occur before death and can be an integral part of end of life planning.

The Takeaway

While end of life planning can be a challenging or sad endeavor, it’s an important step in making sure your assets are directed where you want them to go and that other important wishes are executed as you want. There are four main types of wills to help you legally record your plans. You’ll have options; more than one may suit your needs. And you can decide to use online services or work in person with an attorney. In either case, having the appropriate forms completed will give you peace of mind right now — and help smooth things along for your loved ones in the future during a difficult time.

More Protection Coming Your Way From SoFi

End of life planning is one important way to protect your assets and your loved ones while planning for the inevitable. But there are other ways to make sure you are covering your bases and being prepared for difficult scenarios: with different forms of insurance. SoFi has partnered with some of the best in class companies to offer you reliable and affordable auto, homeowners, renters, and life insurance. We make learning about and purchasing these policies extra easy because it’s all online — it’s the SoFi way! Why not explore the options?


Ladder policies are issued in New York by Allianz Life Insurance Company of New York, New York, NY (Policy form # MN-26) and in all other states and DC by Allianz Life Insurance Company of North America, Minneapolis, MN (Policy form # ICC20P-AZ100 and # P-AZ100). Only Allianz Life Insurance Company of New York is authorized to offer life insurance in the state of New York. Coverage and pricing is subject to eligibility and underwriting criteria. SoFi Agency and its affiliates do not guarantee the services of any insurance company. The California license number for SoFi Agency is 0L13077 and for Ladder is OK22568. Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other. Social Finance, Inc. (SoFi) and Social Finance Life Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderLifeTM policies. SoFi is compensated by Ladder for each issued term life policy. SoFi offers customers the opportunity to reach Ladder Insurance Services, LLC to obtain information about estate planning documents such as wills. Social Finance, Inc. (“SoFi”) will be paid a marketing fee by Ladder when customers make a purchase through this link. All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.
This article is not intended to be legal advice. Please consult an attorney for advice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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7 Financial Aid Secrets You Should Know

As a student (or parent) it can be easy to focus solely on the college application process, and completely forget about financial aid. You spend so much time studying for the SATs (or ACTs) and tweaking your college essay so it perfectly represents you, that after you’ve been accepted and the reality of tuition payments set in, you might feel momentary panic.

It’s no secret that college tuition is expensive. Students and parents save for years to pay for higher education, but sometimes that’s just not enough. According to a Sallie Mae® study, “How America Pays for College 2021 ,” parent income and savings covered 45% of college costs while student income and savings covered 8% of the costs.

Many of us rely on financial aid to bridge the payment gap. Financial aid may come from multiple sources, including scholarships, grants, work-study, federal student loans, and private student loans.

Scholarships and grants are extremely useful forms of financial aid, since students are not typically required to pay back the money they receive. An online survey of students and parents found 72% of college families in 2021 relied on scholarships and grants to cover a portion of college expenses, according to Sallie Mae’s study.

Scholarships, grants, and savings often aren’t enough to cover the cost of attending college. Sallie Mae says 47% of college families borrowed money to help pay for college in 2021. Some families used home equity loans and credit cards, but federal student loans represented the most frequently used source of borrowed money followed by private student loans.

To top it all off, the financial aid application process can be confusing. Between federal aid and other scholarships, it can be difficult to keep everything straight.

Most often, the first step in applying for financial aid is filling out the Free Application for Federal Student Aid (FAFSA®). You can begin filling out the FAFSA on October 1 for the following academic year. The federal FAFSA deadline for the 2022–23 academic year is June 30, 2023, while colleges and states may have their own FAFSA deadlines.

Some schools use an additional form to determine scholarship aid — the College Scholarship Service Profile .

Taking the effort to apply for financial aid early can have a positive impact on your tuition bill. Below we highlight seven financial aid secrets you should know.

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1. Decision Day vs Summer Melt

May 1 is usually decision day, the deadline when prospective college students must decide which college they plan to attend in the fall. But even after this deadline, students can change their minds. This phenomenon is known to industry professionals as “summer melt,” and sometimes it’s triggered by FAFSA verification setbacks.

Students who receive insufficient need-based financial aid, for example, might be compelled to reconsider their college enrollment decisions. Summer melt can give you an opportunity to select a more affordable school for you if you’ve encountered a FAFSA verification roadblock.

Summer melt is a common problem that causes schools to lose students during the summer. Because of this, schools may have a bit of secret wiggle room in their acceptance policy to admit new students over the summer for the fall semester.

2. Writing a Letter

You might be able to take advantage of summer melt with this secret: write a letter. After you get your financial aid offer, you could write a letter to your school’s financial aid office to open the lines of communication.

Let them know how excited you are to attend school in the fall. That’s where you could include a thoughtfully worded inquiry for any additional aid that you might qualify for as a result of summer melt.

When students decide to switch schools or not attend at the last minute, it means that they also won’t be using their financial aid award — which could now be available to other students.

3. Calling the Financial Aid Office

Another way to potentially take advantage of summer melt is to call your school’s financial aid office. Instead of calling immediately after you receive your financial aid award, think about calling in June or July. This allows financial aid offices time to account for students who have declined their financial aid packages.

An appropriately timed call to the financial aid office at your school could mean additional financial aid is allocated to your package — no guarantees, of course, but it never hurts to ask.

4. Submitting Paperwork and Applications On Time

Every school’s financial aid office has to follow a budget. Some financial aid is offered on a first-come, first-served basis, so it helps to submit forms, like the FAFSA, and other applications, on time or even ahead of schedule.

You may be out of luck if you apply for assistance after your university’s financial aid office has met their budget for the year. Some states have early winter deadlines for awarding scholarships and grants. Tennessee residents, for example, must complete their FAFSA by February 1 to be considered for a state-funded Tennessee Student Assistance Award grant.

You can check the deadlines for financial aid in your state through the U.S. Department of Education’s Federal Student Aid website .

Repay your way. Find the monthly student loan
payment and rate that fits your budget.

5. Being Prepared

Have the basics ready to go before you sit down to fill out the FAFSA. If you have all of the information you need before you begin filling out the FAFSA, you’ll likely have an easier time filling out the information.

Usually, each parent and the student will need to create a username and password, which is called the Federal Student Aid ID (FSA ID). You’ll also need:

•   Social Security numbers (for you and your parents)

•   Bank statements and records of untaxed income (possibly)

•   You and your parents’ tax returns (aid awards are based on income from two years ago)

•   Any W2 forms

•   Net worth calculations of your investments (for students and parents)

6. Being Wary of Services that Charge You for Help

If you need assistance filling out the FAFSA, avoid any services that charge you. The first F of FAFSA stands for “Free,” so there is no need to pay for a service to fill the form out for you.

If you need assistance filling out the FAFSA, there are plentiful online resources through the U.S. Department of Education .

7. Filing the FAFSA Every Year

For every year you are a student and want to receive federal aid, you’ll have to file the FAFSA. Get in the habit of filing it every fall, so you’re closer to the top of the financial aid pile.

The Takeaway

Scholarships and grants can be super-helpful additions to a federal financial aid package. The money can reduce your tuition bill and doesn’t usually need to be repaid. Work-study can also be beneficial in helping college students make ends meet.

If you need additional help financing your college experience, SoFi offers private student loans with an entirely digital application process and no fees whatsoever. Potential borrowers can choose between a variable or fixed interest rate and have the option to add a cosigner to the loan.

Learn more about SoFi’s flexible repayment plans and application process for private student loans.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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What Happens When Someone Pays My Student Loans?

If someone offers you assistance in paying off student loans, your immediate answer might be “Go for it!” but it’s important to understand the implications.

While a parent, grandparent, employer, or even a mysterious benefactor could pay off your student loans, they may be responsible for a gift tax if they contribute more than the annual limit. The gift could also come with emotional strings attached.

Read on to learn about the gift tax — and how to repay your student loans if the responsibility is all yours.

Student Loans, Explained

As federal student loan repayment was poised to begin again on August 31, 2022 after a pandemic-related hiatus of two-plus years, and as widespread student loan forgiveness had not come to fruition, those bills were top of mind for many. Borrowers who held private loans did not have any uniform break in payments.

If you applied for private student loans or federal PLUS loans, you either applied by yourself or with a cosigner or endorser, respectively. If you have a cosigner or endorser, that person is legally responsible for repaying the loans if you are unable to do so. But if your student loans are solely in your name, you are responsible for repayment according to the outlined terms.

When you applied for student aid, getting out of student debt may have been the last thing on your mind. But when you’re starting repayment or in the midst of it, it can be challenging to pay down your loans as well as budget for your life.

More employers are offering student loan repayment as a perk. Through CARES Act legislation, employers can contribute up to $5,250 per employee toward student loans through 2025. That sum is not considered part of an employee’s taxable income.

Family members may decide to help, or your spouse may pitch in.

If it’s all on you, there are ways to make student loan payments more manageable.

Can Parents Pay Off Their Child’s Student Loans?

Yes.

If a parent is a cosigner, paying the student loans in full will not trigger a gift tax. In the mind of the IRS, the parent is not providing a gift but is merely paying off a debt.

But if a parent is not a cosigner, a gift tax could be triggered, depending on how much they pay.

The annual exclusion for gifts is $16,000 in 2022. That means an individual can give you up to $16,000 without triggering the gift tax, which the givers, not receivers, generally pay. If your parents file taxes jointly, they would be able to give a combined $32,000 a year, which could include paying down loans. Borrowers who have the good fortune to snag $16,000 from Mom, Dad, Granddad, and Grandma could get a total of $64,000 without any family member having to pay a gift tax.

To avoid triggering a gift tax, one option would be to help pay during multiple tax years. But it’s also a good idea for parents to consider their retirement plans and test what-ifs before offering to pay their children’s student loans. Working with a financial planner may help parents find a path that works for them and their children.

It’s also not an all-or-nothing decision. Some parents choose to pay a portion of student loans or offer cash toward repayment in lieu of other gifts.

Recommended: Should Parents Cosign on Student Loans?

What Happens When Someone Pays Off Student Loans For You?

A person can pay off student loans for you in a couple of ways:

•   Pay the lender directly

•   Pay you, with the expectation you will pay the lender

Once someone has paid off your student loans, it’s as if you had paid them off yourself. You would not have any tax liability.

Gift Tax, Explained

The gift tax applies to the transfer of any type of property (including money), or the use of income from property, without expecting to receive something of at least equal value in return, the IRS says, adding that if you make an interest-free or reduced-interest loan, you may be making a gift.

There are some exceptions. Gifts between spouses aren’t included in the gift tax. That means if you are married and your spouse pays off your loans, that would not trigger a gift tax event. (The IRS includes lawfully married same-sex couples.)

Tuition paid directly to qualifying educational institutions in the United States or overseas is also not subject to gift tax. But student loans are different.

If the gift someone is planning to give you is above the annual exclusion amount, they may want to work with a CPA or lawyer to find the most advantageous way to do so. Splitting up the gift across multiple calendar years can be one way to avoid triggering a gift tax.

Other Options to Pay Off Student Loans

Not everyone has a benefactor, and that’s OK. While someone taking your student loan balance down to zero can seem like a dream, there are realistic ways to ease the burden of student loans, no third party required.

The strategies include student loan refinancing, student loan consolidation and, in some cases, student loan forgiveness.

The one thing that won’t help: if you stop paying your student loans. Ignoring your student loan payments will result in an increased balance, additional fees, and lower credit score.

If you hold federal student loans and stop paying them, part of your wages could be garnished. Your tax refund could be withheld. If you default on a private student loan, the lender might file a suit to collect from you.

In other words, coming up with a repayment plan will be beneficial.

What Is Student Loan Consolidation?

If you have federal student loans, you may consider consolidation, or combining multiple loans into one federal loan. The interest rate is the average of all the loans’ rates, rounded up to the nearest one-eighth of one percentage point.

Federal student loan consolidation via a Direct Consolidation Loan can lower your monthly payment by giving you up to 30 years to repay your loans. It can also streamline payment processing.

Consolidating loans other than Direct Loans may give borrowers access to additional income-driven repayment plan options and Public Service Loan Forgiveness.

What Is Student Loan Forgiveness?

For federal student loan holders, there are several paths toward student loan forgiveness. They include:

•   Income-based repayment. Four federal income-driven repayment programs promise loan forgiveness after 20 or 25 years of payments.

•   Public Student Loan Forgiveness: This federal program was designed to help graduates working in public service have any remaining loan balance forgiven if they meet criteria that include working for a qualifying organization and making 10 years’ worth of payments.

•   Disability discharge: Some people may have their loans forgiven because of total and permanent disability.

What about bankruptcy? It’s extremely difficult to have student loans discharged through bankruptcy.

And while there has been talk from lawmakers on both sides of the aisle regarding sweeping student loan forgiveness, so far that’s all it has been.

What Is Student Loan Refinancing?

Student loan refinancing is loan consolidation of sorts through a private lender. Instead of blending loans into one with an average rate, a borrower takes on one new, private student loan that will pay off previous federal and/or private student loans. The goal is a lower interest rate. The repayment term also may change.

Refinancing federal student loans will mean that borrowers will no longer be eligible for federal repayment programs and other benefits. But if a borrower has no plans to use those programs, a lower rate could make refinancing worthwhile. Getting quick rate quotes with a student loan refinancing calculator can help a borrower see how much money they might save by refinancing one or all of their loans.

Refinancing Student Loans With SoFi

Even if no one in your life is in a position to pay off your student loans, understanding your options for lowering your monthly payments or saving money over the life of the loan can give you multiple avenues toward taking control of your finances.

SoFi offers flexible terms and low fixed or variable rates on refinancing student loans.

Rates are still low, and checking yours is easy.

FAQ

Can I pay off my child’s student loans?

Sure. You can pay off your child’s student loans. But …

Is paying off a child’s student loans considered a gift?

Yes. Paying student loans for someone else is considered a gift and would incur a gift tax for any gift above $16,000 in a calendar year (the gift exclusion cutoff for 2022).

That means both parents can contribute $32,000 per calendar year toward their child’s student loans sans gift tax.

Can I pay off my sibling’s student loans?

Yes. You can absolutely win sibling of the year and pay off your sibling’s student loans. Just know that any gift above $16,000 in one calendar year will trigger a gift tax that you will be responsible for paying.


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL SEPTEMBER 1, 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Do I Need a Student Loan Cosigner? – A Guide

Having a cosigner on a student loan is a bit like a letter of recommendation to get into college. A cosigner can reassure the bank or lender that the applicant is capable of repaying the loan. Their financial history serves as an endorsement for the primary applicant’s financial inexperience.

But a cosigner is not always required for student loans, such as with most federal student loans. Depending on a student’s financial history, employment, and what type of loans they’re applying for, the likelihood of requiring a cosigner will vary. Read on to learn more about what a cosigner is and when it may make sense to add one to your student loan application. This article will also discuss some of the risks involved with being a cosigner, and some tips on how to ask someone to be a cosigner on a student loan.

What Is a Student Loan Cosigner?

A cosigner is a person who agrees to repay the loan if a borrower defaults or is otherwise unable to pay their debt. Adding a cosigner to a student loan application could help the primary borrower secure a lower interest rate, depending on the cosigner’s financial and credit history.

When a cosigner takes on a student loan with the borrower, they’re assuming equal responsibility to repay the loan.

Any negative actions on the loan, such as a late payment or defaulting, could harm the borrower’s credit, and if the cosigner becomes the primary after a default and then also defaults, it could harm their credit as well.

Factors That Determine Whether a Cosigner Is Needed on a Private Student Loan

Before deciding whether a student might need a cosigner on a private student loan, the first step is generally to fill out the Free Application Federal Student Aid (FAFSA®). This will determine how much aid the student will receive, and help the student and their family determine how much of a gap they’ll need to fill with other sources of funding.

Once all other options are exhausted, students could look into private student loans and consider a cosigner. When considering a cosigner, there are a lot of factors to evaluate such as the type of loan you’ll be applying for and factors including your credit history, credit score, income and any history of missed payments. Continue reading for a more in-depth discussion on factors that may influence whether a student borrower might need to add a cosigner to their loan application.

1. What Type of Student Loans Are Being Considered?

The type of loans a person is applying for may affect their need for a cosigner.

Federal Student Loans

For the most part, federal loans do not require a credit check or a cosigner. The federal loan types that do not require a cosigner include:

•   Direct Subsidized Loans

•   Direct Unsubsidized Loans

•   Direct Consolidation Loans

The exception is a Direct PLUS Loan, which does require a credit check. Borrowers interested in a Direct PLUS Loan may need an endorser for the same reasons they may need a cosigner for a private student loan: if their credit history and other financial factors are lacking.

A Direct PLUS Loan can help graduate students and parents of undergraduate students pay for the entire cost of school attendance, minus any other financial aid. Direct PLUS Loans are the only federal student loans that look at an applicant’s credit history, thus the potential need for an endorser.

An endorser is the equivalent of a cosigner — they agree to repay the Direct PLUS Loan if the borrower defaults or is delinquent on payments.

Private Student Loans

If an applicant doesn’t meet the lending requirements on their own, they might need a cosigner to obtain any private student loan. To qualify for a private student loan, applicants typically have to check more boxes regarding financial history than they would for a federal student loan.

According to a report by MeasureOne , 92% of private undergraduate student loans and nearly 66% of private graduate student loans originated in the 2021-2022 school year had a cosigner. Based on this, it is more likely than not that a student will add a cosigner on their private student loan application.

Both Federal and Private Student Loans

Once a student has a full understanding of the financial aid they qualify for after submitting their FAFSA, they can determine if federal student loans and other federal aid like scholarships and grants will cover the cost of their education or if they need to supplement the amount with a private student loan. While the borrower might not need a cosigner for federal loans, they might require one for private student loans they might take out.

2. Is the Student an Undergraduate or Graduate Student?

The necessity of a cosigner may vary depending on whether a person is applying for graduate or undergraduate private student loans.

Undergraduate Student

Undergraduates are generally more likely to need a cosigner on their private student loans. That’s because undergraduates typically haven’t established a lengthy credit history. Without an established credit history, there is no track record for lenders to evaluate. In addition, undergrads might not have a steady income, which can also affect whether they are approved for a loan without a cosigner.

Graduate Student

The type of schooling a person is pursuing won’t have an impact on the need for a cosigner. However, a person’s credit history and income will still factor into the decision.

3. How Does a Borrower’s Credit Score Factor into the Decision?

Most private lenders will look at an applicant’s credit score (among other factors) to determine eligibility. Having a lower credit score may make it more challenging to get a loan without a cosigner.

FICO® Scores (the most common credit scores used by lenders and financial institutions) range between 300 and 850. If a person wants to check their score, many websites offer free credit scores or credit score monitoring (just be sure to read terms and conditions carefully).

It’s possible to get a free credit report annually from AnnualCreditReport.com. It is important to note that this is not the only site where someone can request a free credit report. For example, they can get their credit report directly through the credit bureaus or on other online sites.

Ultimately, it’s up to each individual lender to consider the credit score and other financial factors before approving a loan, and every lender has different criteria.

4. How Long Is the Student’s Credit History?

A person’s credit history gives lenders a sense of their ability to pay on time, or ability to pay off debt in full. The length of a person’s credit history makes up about 15% of their FICO® Score.

Length of credit history is determined by Average Age of Accounts (AAoA). Lenders take the lifespan of a person’s accounts and divide by the number of accounts that person holds. A potential borrower can determine this number by figuring out how long they’ve had each account in their credit history, then dividing by the number of accounts.

The real sweet spot for credit history comes at the seven-year mark. From that point, early negative marks on account might’ve faded away. It shows lenders that a borrower can pay loans and maintain accounts over time.

There are a number of factors at play in lending decisions, but a short credit history could mean that adding a cosigner is beneficial.

Repay your way. Find the monthly student loan
payment and rate that fits your budget.

5. What Is the Student’s Employment Status?

Lenders want to be sure that you can repay your debts, so they’ll generally also evaluate an applicant’s income.

Employed Full-Time

Generally, if a person is employed full time at a salaried job, it shows lenders they have the capability to repay the loan they’re borrowing. Lending requirements vary based on the lender, but having an established income history may help an applicant avoid needing a cosigner.

Employed Part-Time

While part-time employment can still be beneficial for a loan application, it’s possible that a cosigner might help boost the application. The applicant’s debt-to-income ratio will come into play — that is, how much debt a person owes (credit cards, rent, other bills) divided by the income they earn before taxes and other deductions.

Of course, all lender requirements vary, but significant, consistent income can factor into whether the applicant will still need a cosigner.

Only a Student (Not Employed)

If an applicant is not employed, lenders may be more inclined to approve a loan if there’s a cosigner who is able to show stable income.

6. Has the Student Declared Bankruptcy?

Lenders can and do consider all aspects of a person’s financial history before granting a loan, bankruptcy included. Declaring bankruptcy negatively affects a person’s credit score, which private lenders pay close attention to with a loan application. A bankruptcy filing can stay on a person’s credit history for a decade.

Bankruptcy filings can affect a credit score in a number of ways, and depending on how long ago it took place, the effects on a person’s score will vary.

7. Has the Student Defaulted on a Loan?

The terms of each loan are different, but after a period of nonpayment, the loan enters default. Defaulting on a loan stays with a person’s credit history for at least seven years and typically negatively affects their credit score.

If a person has defaulted on a previous loan, they’ll likely need a cosigner on their student loan to potentially bolster their lendability.

8. Has the Student Ever Missed a Payment?

On-time payments each month can help show lenders that a person is a responsible borrower. Missing payments or consistently making late payments can have a negative impact on a person’s credit score. Payment history accounts for approximately 35% of an individual’s FICO® Score.

Consistently missing payments that have affected a person’s FICO® Score might cause a potential lender to require a cosigner. It could also cause concern for a potential cosigner, so students might want to keep that in mind.

A solid history of on-time payments shows a lender that a person is a responsible candidate for a loan and might not need a cosigner.

Choosing a Cosigner

As stated near the beginning of this post, the majority of private student loan borrowers have a cosigner. But not all cosigners are built the same, and choosing the right person to cosign a loan could be as important as the terms of the loan itself.

A cosigner should not only have a strong financial history, but also a strong relationship with the applicant. A cosigner might be a parent or blood relation, but it doesn’t have to be. A cosigner ideally has a stable financial history and a relationship to the applicant where they feel comfortable discussing money.

Asking Someone to Be a Cosigner

There’s a common misconception that cosigning on a loan is as easy as signing a contract, but it actually means more than that. When a person asks someone to be their cosigner, they shouldn’t shy away from discussing the challenging topic.

It may make sense to talk about worst-case scenarios with a cosigner, let them know it would be their responsibility to take on the payments if the borrower defaults. Discuss how the borrower could repay the cosigner in the event that the borrower can’t make payments.

Risks of Cosigning

Beyond the worst-case-scenario discussion, cosigners should know the additional risks they take on when cosigning a student loan:

•   Credit score. Cosigning a loan will affect a person’s credit score, since they’re taking on the debt as well. Even if the borrower makes on-time payments and doesn’t default, the cosigner will see a change in their credit score by taking on the additional debt. It could potentially benefit their score.

•   Liability. If the borrower defaults on the loan, it becomes the cosigner’s responsibility to pay for it. A lender can come to collect from the cosigner, seizing assets and garnishing paychecks to cover missed payments.

However, the cosigner doesn’t need to stay tied to the loan forever. Private student loans may have a cosigner release policy in place. After a duration of on-time payments and additional paperwork, a lender may release the cosigner from the loan, leaving the borrower on their own.

It might sound easy, but a cosigner release isn’t a guarantee and not all private loans will offer this option. Read the terms of your loan carefully to understand the requirements for cosigner release.

The Takeaway

Like every college application, each loan application is a little different. Certain aspects of a person’s credit history or employment might make them more compelling to a lender. Other elements, like late payments or a limited credit history, might make a person less compelling to lend to.

Adding a cosigner to a private student loan is common and can improve a person’s chance of approval, sometimes even with a lower interest rate than if they applied on their own.

If a student has exhausted all of their federal student loan options, private student loans could be an option worth considering.

SoFi offers private student loans with no origination fees, no late fees, and no insufficient fund fees. Plus, SoFi offers flexible repayment options to help students find the loan that fits their budget.

Learn more about private student loans with SoFi.


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Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
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Finding Jobs That Pay Off Student Loans

Jobs that help pay off a portion of student loans are becoming more common and for a good reason. The average student loan borrower has around $37,000 in student loan debt.

Companies that help to repay a portion of student loans are in the minority, so you may have to do some research to get student loan assistance as a benefit. To help you, here’s what to know about what’s available, companies that offer this perk, and what you can do to try and negotiate for it.

Types of Job-Based Student Loan Assistance Programs

There are two types of student loan assistance you may receive through an employer: repayment assistance programs where your employer is a participant and repayment assistance benefits your employer offers directly.

Repayment Assistance Programs

Depending on your chosen career, you may be eligible to receive student loan assistance through a federal – or state-based program. There are several programs for those working in public service careers, like the Public Service Loan Forgiveness and Teacher Loan Forgiveness programs.

That said, these programs typically require you to commit to working in a specific job or a certain area (like medicine, law, or military service, for example) for a set number of years, which can be challenging if you don’t enjoy the job or want to pursue a different career path somewhere else.

But if you fulfill your service obligation, you may get as much as your full student loan balance forgiven.

Repayment Assistance Benefits

About 8% of employers in the U.S. offer student loan repayment assistance as a benefit, according to the Society for Human Resource Management . The terms of a repayment assistance benefit can vary by employer. For example, some may offer it as a match of the employee’s payments and others may simply pay a set amount toward an employee’s loan balance each month.

The amount you receive from a repayment assistance benefit may be less than what you might get through a government repayment assistance program. But you may not need to commit to a service obligation to qualify, and you may be able to negotiate how much you’ll receive.

Types of Jobs That Offer Student Loan Forgiveness

In order to qualify for certain types of loan forgiveness, borrowers may need to meet certain employment requirements. Here are some of the jobs that could potentially allow someone to qualify for federal student loan forgiveness programs.

1. Federal Agency Employee

Federal agencies may be allowed to offer student loan assistance as a perk to appeal to candidates. In order to qualify for this student loan repayment assistance, the employee is required to sign onto a three-year contract with the agency. The benefit may be up to $10,000 per year, but cannot be more than $60,000 per person. Additionally, the benefit is only available to for federal student loans.

2. Public Service Worker

If you work in the public service sector for a qualifying organization, such as the government or a non-profit, you may qualify for Public Service Loan Forgiveness (PSLF). To pursue PSLF, borrowers are required to make 120 qualifying payments while certifying their employment with a qualifying employer. After this period, any remaining amount is forgiven. PSFL is only available to borrowers with federal student loans.

If you have a Perkins loan and work in public service, you could potentially qualify for loan cancellation.

3. Medical Field

The Association of American Medical Colleges maintains a database with information on loan assistance programs for doctors by state.

Medical professionals who work in underserved areas may also qualify for loan forgiveness through the National Health Service Corps Loan Repayment Program . In this program, medical professionals must commit to working for at least two years in a Health Professional Shortage Area.

Refinancing medical school student loans may be another option to consider for medical professionals who are not pursuing any loan forgiveness programs. While refinancing would eliminate loans from any federal forgiveness programs, it could potentially allow borrowers to secure a more competitive interest rate.

4. Automotive Professionals

Professionals in the automotive industry may qualify for loan forgiveness through the Specialty Equipment Market Association (SEMA) Loan Forgiveness Program . In 2021, SEMA awarded funds to pay for student loans to 22 working professionals.

5. Lawyer

Lawyers may also be able to qualify for PSLF. In addition, there are other lawyer-specific programs that provide assistance to lawyers paying off student loan debt including the Department of Justice Attorney Student Loan Repayment Program or John R. Justice (JRJ) Program .

6. Teacher

Student loan forgiveness for teachers is available. Teachers who work in special education, are considered highly qualified teachers, or work in underserved areas may qualify for the Teacher Loan Forgiveness Program . The amount of loan forgiveness available is dependent on the teachers area of specialty and can be either $17,500 or $5,000.

7. Peace Corps

Peace Corps volunteers may be eligible to defer their loans or pursue PSLF.

8. Veterinarian

Veterinarians who work in underserved areas may qualify for up to $25,000 in student loan repayment assistance through the U.S. Department of Agriculture’s Veterinary Medicine Loan Repayment Program.

8 Major Companies that Repay Student Loans

Hundreds of large and small employers offer jobs that pay off student loans, but it’s not always easy to find out which ones provide the benefit. To help you get started, here are 10 well-known companies that repay student loans.

1. Abbott Laboratories

The company’s Freedom 2 Save program functions a bit differently than other repayment assistance benefits in that it combines efforts to pay off student loan debt and save for retirement.

Full- and part-time employees who qualify for the company’s 401(k) plan and contribute 2% of their pay toward student loan repayment, will receive a contribution of 5% of their salary in their 401k account. Employee 401k contributions aren’t required.

2. Chegg

Full-time employees of the education company receive an annual contribution to their student loan payments.

3. Estee Lauder

The beauty company provides employees with $100 per month in student loan assistance, up to a total of $10,000.

4. Fidelity

As an employee of the investment brokerage firm, you’ll may be eligible receive up to $15,000 toward your student loan payments.

5. Nvidia

If you’ve graduated within the last three years, Nvidia will match your student loan payments dollar for dollar up to $500 per month. The lifetime cap is $30,000.

6. Penguin Random House

Employees who have been with the publisher for at least one year can receive up to $1,200 in student loan repayment assistance each year, for a total of $9,000 over seven-and-a-half years.

7. PricewaterhouseCoopers

As a participating associate or senior associate, you can receive $1,200 in student loan payments each year.

8. SoFi

As an employee with SoFi, you’ll get $200 each month in student loan repayment assistance.

Negotiating a Student Loan Repayment Benefit

If you’re looking for a job, keep an eye out for companies that repay student loans as an employee benefit. If you can’t find one, you can still try to negotiate the benefit for into your total compensation. Here are some ways to do it.

Doing Your Research

Resources like Payscale and Glassdoor can help give you an idea of the salary and benefits that may be available from various companies. Look at what the company you’re interested in typically offers as well as what you might get with a similar position somewhere else.

If anything, this process can give you a better idea of what you’re worth. But it will also give you a benchmark that you can use to negotiate for student loan repayment benefits, along with other aspects of your compensation.

Making Your Interests Clear

Helping a potential employer understand why student loan repayment is important to you can help set the stage for the entire conversation.

In addition to salary, employers can consider several other factors to make up your total compensation. So knowing what’s most important to you can help them make a more attractive offer.

Asking for a Signing Bonus Instead of Monthly Payments

While a signing bonus isn’t specifically designed as a student loan repayment benefit, you can use it that way. In fact, making a lump sum payment toward your student loans could help you accelerate your student loan debt repayment timeline.

Asking for the Opportunity to Revisit the Request in the Future

If you can’t manage to persuade a potential employer to provide you with student loan assistance, that may not be the end of it. You could ask for the chance to talk about your compensation again in six months or a year.

During that time, you may be able to prove to your employer that it’s worth the investment on their part. Or you may have planted a seed for the employer to create a student loan repayment benefit for all employees.

Making Student Loan Repayment a Priority

Whether or not you can find jobs that pay off student loans, you can still make it a priority to eliminate your student debt as quickly as possible. A student loan repayment assistance benefit can help you achieve that goal, but it can’t do it on its own.

As such, it’s essential to consider other options to save money, such as refinancing your student loans. While refinancing can be a helpful option for some borrowers, it won’t make sense for everyone. If federal student loans are refinanced they’ll lose eligibility for federal programs and benefits, like PSLF or income-driven repayment plans.

If you qualify, you may be able to reduce your interest rate or your monthly payment. With a lower interest rate you could potentially save money over the life of your loan.

The Takeaway

The number of companies offering student loan repayment assistance as a part of their employee benefits package is growing. Some jobs might also offer the opportunity for the borrower to apply for student loan forgiveness. For example, there are programs available for medical professionals, teachers, and those that work in the government or non-profit sector.

Another opportunity for managing student loans is refinancing, which could allow qualifying borrowers to lower their interest rate — making the loan more affordable in the long run. If you’re interested in refinancing, consider the options available at SoFi.

When you refinance with SoFi, there are no prepayment penalties or origination fees. You can start taking control of your student loan debt and get a quote in just two minutes.

FAQ

What careers pay off student loans fastest?

High paying jobs may help borrowers repay their student loans quickly. However, some jobs may allow borrowers to pursue a loan forgiveness program. While these programs may not expedite the repayment process, they could help make student loan repayment more manageable.

What companies pay off student loans?

Companies including SoFi, Fidelity, Penguin Random House, and Nvidia all offer student loan repayment assistance programs. Specific benefits vary by company.

What kind of jobs qualify for student loan forgiveness?

The type of job that qualifies for student loan forgiveness may vary depending on the program. Jobs in the government or non-profit sector may qualify a borrower for Public Service Loan Forgiveness. Teachers may qualify for Teacher Student Loan Forgiveness programs. Some medical professionals may qualify for programs such as the National Health Service Corps Loan Repayment Program.


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SoFi at Work is offered by Social Finance Inc. SoFi loans are offered by SoFi Lending Corp. or an Affiliate (dba SoFi), licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org ). The Student Debt Navigator tool and 529 Savings and Selection tool are provided by SoFi Wealth, LLC, an SEC-Registered Investment Adviser. For additional product-specific legal and licensing information, see SoFi.com/legal.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com