federal student loans Archives

May 18, 2022

Is Inflation Eating Your Budget? 13 Ways to Stretch Your Money

Follow these 13 actionable tips to stretch your money!

Whether you own or rent, there’s no doubt your budget has been feeling the effects of recent inflation. And while you’re powerless to improve the current economic changes, that doesn’t mean you can’t take action to combat higher prices. High inflation decreases your purchasing power, forcing you to spend more and get less in return. As a result, higher prices make it difficult to save money and reach your financial goals. Perhaps you’re not ready to take drastic measures like moving to a smaller apartment or taking public transportation. Instead, start with minor changes that will stretch your money so you get more bang for your buck.

1. Set financial goals

Goal setting is an important — yet often overlooked — step when trying to make progress with your finances. Don’t worry if it feels premature based on your current affairs. Setting goals and executing a plan to achieve them is powerful.

Keeping a specific goal in mind makes you more intentional with your working, saving and spending. In addition, focusing on your financial goals will give you the necessary clarity to make sound money decisions and the motivation to push forward.

2. Live on a budget

Getting good at making your money go further requires a certain level of financial awareness. Once your paycheck hits your bank account, do you have a plan for how you’ll spend your money, or do you go with the flow?

Having a plan is crucial, and a budget is a spending plan. The act of creating a budget is simply making a plan for how you’ll spend your money. Learning to live on a budget means you consistently create a spending plan and take steps to stick to that plan throughout the budget period.

Budgeting is a marathon

The first step to successful budgeting is to expect a learning curve. Becoming a budgeting master is a valuable skill that takes time to develop. So, commit to pushing through the tough months even when it feels like you’re doing it all wrong.

Budget your way

A quick Google search on “how to budget” will display many budgeting types and options — don’t get overwhelmed. As your budgeting prowess grows, you’ll begin to learn what methods do and do not work for you.

Approach budgeting as one-size-fits-some rather than one-size-fits-all. There are many different ways to budget. And, when used consistently, each of them will move you closer to reaching your goals. You may realize you prefer to manage your money with digital tools or use a budget binder to organize a more traditional paper budget.

Humans have a pesky habit of overcomplicating things, but budgeting doesn’t require anything elaborate or complicated. If you’ve tried percentage-based budgeting and it was an epic fail, there are simpler options to help you stretch your money further.

We’ve discovered that many folks gain more control over their finances when they manage their money using a zero-based (or zero-sum) budget.

In its simplest form, a zero-based budget looks like INCOME – EXPENSES = 0.

Assign every dollar of your income to carry out a specific financial “job.” Each dollar must serve a purpose, and it’s up to you to decide whether that purpose — spend, save, invest or give. Once you’ve given each of your dollars their assignments and your total income minus your total expenses equals zero, you have implemented a proper zero-based budget.

3. Track your spending

If you often wonder where your money went, it’s time to track your spending. While you may have a general idea of where your money goes each month, how clear are you on the specifics? For example, do you know how much money you actually spent on groceries, fuel and dining out last month?

Get clear on exactly how much you’re spending in each budget category. Having a better grasp on your spending is especially important when deciding how much rent or car payment you can afford each month.

Grab your phone or a notebook and add an entry each time you spend money. Exclude fixed expenses as you’ll be tracking those in your actual budget. Instead, focus on logging your Target trips, grocery runs and coffee pitstops.

Track your spending for a solid month, if possible. If you can’t swing a month, aim for at least two full weeks. At the end of your tracking period, enter your spending data on a spreadsheet or grab a few highlighters to color-code your spending.

Total each category to see exactly how much you’ve spent and compare it to your budget. The information you’ll gather from this exercise is invaluable and helpful when you want to stretch your money in a more balanced way. Your total spend numbers will point to where most of your spending is.

Your spending should reflect your values and priorities. If you discover this is not the case for you, what adjustments you need to make will be clear.

4. Avoid overspending

Overspending can creep up on you. What may feel like $10 swipes of your card a few times a week can quickly amount to high credit card balances or going over budget.

Consider these simple changes to reduce overall spending:

Order groceries online to avoid impulse purchases
Reduce online shopping frequency (e.g., order from Amazon only once per month)
Keep a running “wishlist” of items you want or need. When you come across a great deal, check your list — if the thing is on your list, buy it. If it’s not, move on.
Unsubscribe from retail emails that tempt you to spend
Add a personal spending category to your budget. Allocating a specific amount of money to spend in any way you see fit, guilt-free.

It’s not about money

Overspending is often misleading. The reality is overspending is rarely about the actual spending and is almost always caused by an emotional trigger. Therefore, the key to curbing overspending is identifying your trigger(s) and avoiding it (them).

Think back to the last time you felt shame or guilt for overspending. Then, go deeper to understand the underlying emotion that drove your spending? Were you tired? Did you have a bad day at work? Did you fight with your partner?

Retail therapy may feel helpful because we get a boost of adrenaline when we spend. However, you only perpetuate the problem when you avoid dealing with the emotions driving your spending habits. Instead, pay attention to exactly how you’re feeling the next time you experience the urge to spend money.

Once you’ve identified your spending triggers, create a plan to avoid them and break your pattern of overspending.

5. Negotiate your bills

A great way to stretch your dollar is to negotiate your bills each year. You’ll be shocked by how many of your service providers are willing to lower your rates with a simple request.

Review your monthly expenses and make a list of providers to contact. You can call the company or use their live chat feature if they have one. Explain to the representative that you want to reduce your monthly payment and inquire about their best deal. Expect a few “nos” and many a “yes,” especially if you’re kind and polite when requesting a discount.

This strategy is perfect for saving money on your:

Utility bills
Cell phone bill
Cable bill
Car insurance bill
Credit card and bank fees
Other insurance premiums
Rent

Regarding medical expenses, your best bet is to contact the billing department and offer to pay them a percentage of the total balance. Often, the provider is willing to accept a fraction of the amount owed to settle the account.

6. Pay off debt

Debt payments, especially those with high-interest rates, can eat up your income quickly. Creating a debt payoff plan will give you a road map to paying off your debt and keeping the money you previously sent to your debtors each month.

In addition, if you have a good payment history, contact your credit card servicers and request a lower interest rate. Refinancing is also an excellent option for securing a lower mortgage payment or reducing your minimum payment on personal loans or federal student loans.

Avoid future debt

As you work to get out of debt, it’s good practice to avoid taking on future debts. Trading old debt for new debt is counterproductive and will keep you stuck in a perpetual debt cycle.

7. Plan ahead

Planning into the next quarter, or even an entire year, can help you maximize your savings. In addition, saving a full three to six months of living expenses as an emergency fund will prepare you for any emergencies you experience.

Maintaining an emergency fund will protect your finances against increased expenses in the future, possible sickness, accidents or loss of income.

Forecast your upcoming expenses for the next 6-12 months and determine which you can begin saving for now. Items, such as Christmas gifts, birthdays, tuition, vacations, annual bills, etc., are all expenses you can save for, using sinking funds.

Save a small amount each month (or paycheck) until you save enough money to cover the expenses in full. Keep your sinking funds in a separate savings account to avoid accidental spending.

8. Try a savings challenge to stretch your money

Challenges and competitions are very motivating. And when otherwise unpleasant activities feel like a game, even adults can find enjoyment. Get started with a simple challenge, such as saving each five-dollar bill you receive or tossing your loose change into a jar for a predetermined time.

Are you competitive by nature? Ask some close friends or family members to join you. You’ll all benefit from holding each other accountable and boosting the competition factor.

9. Plan your meals

More than any other suggestion on this list, meal planning has the potential to stretch your money further. You’ve likely noticed your grocery bill increasing month after month. Plan out your meals and use that plan to create a shopping list.

Making a mental note of meals you’re hungry for while grocery shopping does not constitute meal planning. More often than not, heading to the grocery store without an intentional plan will cause you to go over budget.

Food waste accounts for 30-40 percent of the food supply in the United States (as of 2021). Shopping for groceries without planning often leads to a fridge full of unused fresh fruit and produce at the end of the week. If your food budget is $1,000 per month, that means $300-$400 of that budget will probably be wasted, if you’re not planning.

10. Stretch your money by ditching your cable

One of the easiest ways to maximize your money is to cancel your cable service. Today, 56 percent of U.S. homes no longer rely on cable or satellite boxes for content.

We’re fortunate to have the unique opportunity to stop paying for dozens of channels we don’t watch and customize our viewing experience. In addition, the number of available streaming services has exploded in recent years, with live sports and bundles finally being an option without cable packages.

Have an attachment to traditional cable and refuse to go without it? Keep your subscription but use tip No. 5 to negotiate a better deal.

11. Get a programmable thermostat

Unfortunately, energy costs are on the rise, too. Depending on your location, you’ll experience increased costs throughout the summer months (even if you’re trying to stretch your money). However, an Energy Star Certified programmable thermostat can cut your utility costs by up to 8 percent per year (around $50/year).

Not only will a programmable thermostat save you money but buying a “smart” model that works with Amazon’s Alexa or Google’s Home systems will also offer the convenience of allowing you to control the temperature with your voice.

Double your savings

Some programmable thermostats can cost upwards of $200, but more affordable options are available. In addition, many natural gas and electricity providers offer rebates for switching to a programmable thermostat.

In some instances, the rebate amount may even exceed the thermostat price. Contact your providers before purchasing your thermostat to determine which models qualify for rebates in your area.

12. Use an app

Looking for more convenient ways to stretch your money? There’s an app for that! Using mobile apps to save money or earn cashback on purchases are easy ways to combat higher prices.

Apps are available to save money on groceries, household items and even fuel. Other apps offer cashback when shopping online and in-store with your favorite retailers. There are even apps that will reward you for exercising.

Keep in mind that using cashback apps won’t make you rich. But using them consistently will help you save money on your everyday purchases, plus earn cashback rewards you can redeem for gift cards or cash.

13. Get a side hustle

There’s no doubt that cutting costs and saving money is a solid strategy to help stretch your money. But, focusing on increasing your income at the same time will boost your finances into overdrive. Plus, finding new, creative ways to earn small amounts of money in your free time will diversify your income and put you on the fast track to reaching your financial goals.

Monetize your passion

Here’s the good news: we live in an era where you can make money in countless unique, exciting ways. You no longer have to work overtime at a job you hate to make your rent payments each month.

People are turning their passions into full-time incomes from side hustles, such as pet-sitting, baking and even posting on social media. Brainstorm a list of your favorite hobbies and different ideas to monetize them.

The bottom line

Rest assured, if you’re feeling increased financial pressure, you’re not alone. Understand that maintaining financial stability in these uncertain economic times is still possible. Lowering your expenses and making a margin in your budget will allow you to spend your money on the things that matter most.

Source: rent.com

May 17, 2022

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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Source: sofi.com

May 16, 2022

8 Things You Can Do Today to Stop Stressing About Money

Save more, spend smarter, and make your money go further

A little stress is a good thing. It keeps us on our toes, challenges us to improve and can even lead to healthier brain function. A life without any stress at all would be pretty boring.

But when it comes to money, most people are dealing with more than just a little bit of stress. On this end of the spectrum, the upsides of stress are replaced with even more downsides – poor sleep, increased anxiety, decreased immunity and more. Just about everyone could benefit from stressing less about money.

That might be easier said than done, but there are some tried and true strategies we can recommend. Here are some of our favorites.

Adjust Your Withholding

Emily Guy Birken, author of “End Financial Stress Now,” said one of the fastest ways to add more money in your budget is to adjust your tax withholding at work. If you’re used to getting a large tax refund, you can change your tax withholding status to make your regular paycheck larger.

Talk to your HR department about how to change your tax withholding and use the IRS tax withholding calculator to see what you specifically need to change. Depending on when your employer implements the changes, they could come into effect during your next paycheck or the one after.

“The only caveat you need to remember is that you’ll get a smaller or no refund in April,” Guy Birken said.

Start a Money Journal

Research has shown that journaling about your problems can lead to reduced stress and anxiety. If you’re worried about money, take a notebook and start writing down what you’re worried about. Consider it a brain dump exercise; just start writing and don’t worry about having all the information perfectly laid out.

Once you’re done, go through the entries and prioritize your stressors. Are you more worried about saving for retirement or establishing an emergency fund? Are you more worried about your student loans or your credit card balance? Try to list items in order from most important to least important.

After prioritizing the items, start a new list and break down the steps you need to take. Then, you can start tackling those tasks and reduce your stress.

Call Your Credit Card Provider

If you have a credit card balance, try calling your provider and asking for a lower interest rate. Remind them that you’ve been a long-time customer and that you’ve never missed a payment. A lower interest rate will prevent more interest from accruing and help you pay off the balance faster, which should help alleviate some financial stress.

Switch to a Lower Student Loan Payment

Lowering your monthly student loan payment can provide some breathing room in your budget. If you have federal student loans, you can switch to an income-driven repayment (IDR) plan which may result in a lower payment. IDR plans also offer loan forgiveness after 20 or 25 years, depending on the plan and type of loan.

Here’s how much of a difference you might see every month. Let’s say you owe $50,000 in federal student loans with a 5.28% interest rate and a 10-year term. If you switch to one of the IDR plans, your monthly payment would be $256 compared to $537 on the standard 10-year plan.

The main downside of an IDR plan is that your repayment term is extended, and you may owe taxes on the forgiven amount when the term is over. But it’s a good temporary fix if you need a lower payment. You can always switch back to the standard plan if you want to repay your loans faster.

Lower your Bills

If you need more breathing room in your budget, try negotiating with your internet, cable and cell phone providers. You may also be able to lower any outstanding medical bills if you call the billing department and ask for a discount.

“Internet and cable service is an easy place to start because they’re used to be negotiated with,” Guy Birken said.

Some tenants have had luck negotiating their rent during the pandemic, especially if they live in a city where people have moved out in droves.

Examine your Transactions

A 2020 Mint survey found that 65% of Americans don’t know how much they spent last month. While ignorance may feel like bliss, the anxiety that comes with being unaware of your spending feels more like misery.

Print out or download your credit card and bank statements from the past month and parse through them. You may discover that you’re still paying for a makeup subscription box or gym membership you thought you canceled. You may also find transactions you don’t recognize, which could be evidence of fraud.

Cancel any subscriptions you no longer use and ask for a refund if the expense has gone through within the past month. Be persistent about canceling. Sometimes it can take weeks for the request to go through, so set a calendar reminder to double-check that the subscription has been canceled.

Start a Budget

If you discover that you’re spending more than you earn, you need to make some radical changes. Start by making a budget, which can help you track spending and free up money to save, pay off debt and meet your other financial goals.

You can use Mint to create a budget. Mint will suggest categories based on your current spending and show how much you spend on average. You can then decrease or increase the amounts depending on your goals. When you’re close to exceeding the budget, you’ll get an email notification.

If you’re new to budgeting, don’t be surprised if you keep going over budget in certain categories. It takes time to change your financial habits, so be patient with yourself.

Close Old Accounts

A common stressor is having to manage multiple accounts. You can forget about one and end up with an overdrawn bank account or some fraudulent activity. If you have several accounts you don’t need or use regularly, consider consolidating them. After you do that, set up your bills, credit cards and loans on autopay so you don’t have to worry bout missing a due date.

“It made it easier to maintain the financial aspect of our lives because we didn’t have a sprawling mess to manage and many of the ‘day to day’ activities were on autopilot,” said Jim Wang of Wallet Hacks.

Save more, spend smarter, and make your money go further

Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins. More from Zina Kumok

Source: mint.intuit.com

May 14, 2022

Guide to Refinancing Your Student Loans After Marriage

After getting married, you’ll start to merge your life, your home, and possibly your finances with your partner. As you plan for the future, it’s helpful to consider the implications of student loans and marriage—which can affect your credit, your ability to get a home mortgage, and even the repayment of your student debt.

Consolidating your federal loans or refinancing student loans after marriage may be options to consider as you begin handling finances in your marriage and working together to reach your financial goals

Student Loans and Marriage

There are currently over 45 million borrowers in the U.S. and the total amount of student loan debt is $1.7 trillion. So the odds are high that either you or your partner may have student loans. As you begin planning for your financial future together, it’s helpful to look at how marriage can affect student loan payments.

Recommended: What is the Average Student Loan Debt?

What Happens to Student Loans When You Get Married?

If you haven’t already had a conversation about student loans and marriage before tying the knot, you and your partner should sit down and discuss your individual student loan debt: how much you have, whether you have federal or private student loans, as well as what your balances, payment status, and monthly payments are. It’s important to share this information since getting married may change your debt repayment plans.

If someone has federal student loans and is on an income-based repayment (IBR) plan when they get married, for example, their monthly payments may increase post-marriage as income-based repayment plans are determined by household income and size. Depending on how a couple chooses to file their taxes, the government may take a new spouse’s salary into account when determining what the borrower’s monthly payments should be.

Because federal student loan borrowers on an income-based repayment plan have to recertify each year, the current year’s income is taken into account which may be higher after marriage if both spouses work. If the borrower’s new spouse doesn’t earn income then they may actually see their monthly payment requirements drop as their household size went up, but their household income remained the same.

Household income also affects how much student loan interest a borrower can deduct on their federal taxes. It’s worth consulting an accountant if a newly married couple needs help figuring out where they stand financially post-marriage.

It’s also important to be aware of how marriage affects your credit score as how someone manages their student loan debt is a factor. Since spouses don’t share credit reports, marrying someone with bad credit won’t hurt your credit score. That said, when it comes time to apply for a loan together, a bad credit score can make getting approved harder—which is another reason it’s key to get on the same page about repaying any debt on time.

Recommended: Types of Federal Student Loans

Refinancing Student Loans After Marriage

Refinancing student loans gives borrowers the chance to take out a new student loan with ideally better interest rates and terms than their original student loan or loans. Some borrowers may choose to consolidate multiple student loans into one newly refinanced loan to streamline their debt repayment process.

The result? One convenient monthly payment to make with the same interest rate and the same loan servicer instead of multiple ones.

As tempting as it may be to combine debt with a spouse and work toward paying it off together, married couples typically cannot refinance their loans together and each spouse would need to refinance their student loans separately. But even though a couple can’t refinance their student loan debt together, they’ll still want to be aware of what’s going on with their partner’s student loans.

Recommended: Top 5 Tips for Refinancing Student Loans in 2022

How to Refinance Student Loans After Marriage

Refinancing student loans after marriage looks the same as it does before marriage and is pretty straightforward. The student loan borrower will take out a new loan, which is used to repay the original student loan.

Ideally, this results in a better interest rate which will help borrowers save money on interest payments, but this isn’t a guarantee. Before refinancing, it’s important that borrowers shop around to find the best rates possible as factors like their credit score and income can qualify them for different rates.

Borrowers have the option of refinancing both federal and private student loans, but it’s worth noting that refinancing a federal student loan into a private one removes access to valuable federal benefits like income-driven repayment plans and loan forgiveness for public service employees.

Refinancing vs. Consolidating Student Loans After Marriage

Borrowers can choose to refinance or consolidate their student loans before or after marriage.

If a borrower has multiple federal student loans, then they can choose to consolidate their different loans into one Direct Consolidation Loan. This type of loan only applies to federal student loans and is offered through the U.S. Department of Education.

This type of loan takes a weighted average of all of the loans consolidated to determine the new interest rate, so generally this is an option designed to simplify debt repayment, not to save money. If a borrower chooses to consolidate through a private lender, they will be issued new rates and terms, which may be more financially beneficial.

Consolidating through a private lender is a form of refinancing that allows borrowers to take out one new loan that covers all of their different sources of student loan debt. While some private lenders will only refinance private student loans, there are plenty of private lenders that refinance both private and federal loans. As mentioned earlier, refinancing a federal loan means losing access to federal protections and benefits.

Refinancing can be advantageous if the borrower is in a better financial place than they were when they originally took out private student loans. If they’ve improved their credit score, paid down debt, and taken other steps to improve their financial picture, they may qualify for a better interest rate that can save them a lot of money over the life of their loan.

Another option in refinancing student loans after marriage is co-signing a partner’s loan. Doing so may mean that you can leverage greater earning power and possibly better credit, but it also means both partners are responsible for the loan, and can put one partner at risk in the event of death or divorce.

Student Loan Refinancing With SoFi

SoFi refinances both federal and private student loans, which can help borrowers save because of our flexible terms and low fixed or variable rates. Borrowers won’t ever have to worry about any fees and can apply quickly online today.

Learn more about refinancing student loans with SoFi.

FAQ

What happens when you marry someone with student loan debt?

If someone’s new spouse has student loan debt, this indirectly affects them. While the debt won’t be under their name or affect their credit score when it comes time to apply for credit products with their spouse (such as a mortgage loan) their credit score and current sources of debt will likely be taken into account.

Is one spouse responsible for the other’s student loans?

No one spouse is directly responsible for their spouse’s student loans, but it’s important to work together to pay off student loan debt. Again, once it comes time to apply for a joint loan, any student loan debt can have an effect on eligibility.

Does getting married affect student loan repayment?

Getting married can affect student loan repayment if a borrower is on an income-based repayment plan for their federal student loans. This type of repayment plan takes household size and income into account when determining what the borrower’s monthly payment should be. If their spouse brings in an income they may find their monthly payments are higher, but if their spouse doesn’t have an income their payments may become smaller.

Photo credit: iStock/South_agency

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.
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.
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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Source: sofi.com

May 12, 2022

Student Loan Interest Rates for June 2022

There’s no way around it — college is expensive. This means that for many students, taking out a loan is the only way to realistically cover these expenses. And, like most other loans, student loans accrue interest.

In this article, we’ll explore the current interest rates across the most common student loan products, including federal and private student loans.

When we discuss federal interest rates on student loans in this article, we’re referring to what the rates would be when the freeze is lifted.

Comparing Rates Between Federal, Private and Refinance Loans

Something you may notice is that, at the lowest end, private lenders seem to offer better interest rates than federal. It is important to note that these lowest interest rates are very difficult to get — your credit needs to be outstanding.

It’s also important to remember that, although fixed interest rates appear to have a higher range in the tables below, your interest rate by definition can change. So, while you may qualify for a lower interest rate on a variable-rate loan, it’s entirely possible that this rate will eventually go up and become higher than you would have gotten with the fixed-rate loan. This is simply the tradeoff (and risk) of variable interest rates.

Federal Loan Interest Rates at a Glance

Loan Type	Borrower	Fixed Interest Rate	Loan Fee
Direct Subsidized and Direct Unsubsidized Loans	Undergrad students	3.73%	1.057%
Direct Unsubsidized Loans	Graduate or professional students	5.28%	1.057%
Direct PLUS Loans	Parents and graduate or professional students	6.28%	4.228%

Federal rates increased across the board for the 2021-2022 school year by nearly a whole percentage point. That’s unfortunate, but they are still lower than they have been for years, and generally much lower than an equivalent private student loan.

Federal loans come in two basic types: subsidized and unsubsidized. The primary difference is around when the interest starts accruing:

Subsidized student loan: Interest is paid by the Education Department as long as you’re enrolled at least half-time in college.
Unsubsidized student loan: Interest begins to accrue as soon as the loan is dispersed.

There are some other differences, but they’re relatively minor compared to this.

The last thing to cover with federal loans is the loan fee (also known as the origination fee). This fee is calculated as a percentage of the total loan amount and then deducted automatically from each disbursement. In practice, this means you’ll receive a smaller loan than the amount you actually borrowed.

Private Loan Interest Rates at a Glance

Loan Type	Interest Rates
Fixed rate	3.34% to 14.99%
Variable rate	1.04% to 11.99%

The wide variation in interest rate ranges is due to two factors: different lenders offering different rates, and the fact that the rate you’ll get is impacted by your credit and other factors.

As mentioned above, fixed interest rates tend to have higher rates on paper, but you don’t have to worry about that rate increasing on you, which is a very real possibility with variable-rate loans.

Loan Refinance Interest Rates at a Glance

Loan Type	Interest Rates
Fixed rate	2.59% to 9.15%
Variable rate	1.88% to 8.9%

If your credit is good, it’s possible to refinance your existing student loan to get a lower interest rate. This is not always possible, but it can be an option worth exploring. These refinanced interest rates can themselves be lower than “normal” private rates, so it can be an option worth exploring.

How Student Loan Interest Rates Are Determined

Although federal and private loans are technically different, they often follow similar trends. In other words, when federal student loan interest rates go up, private rates are likely to do the same. Likewise for when they go down. Let’s look at what actually goes into determining federal and private interest rates.

Federal Student Loan Interest Rates

These student loan interest rates are set each year by Congress, based on the high yield of the 10-year Treasury note auction in May. The new rate applies to loans disbursed from July 1 to June 30 of the following year.

Federal student loan rates are always fixed. This means that they won’t change during the life of the loan — whatever interest rate you get when you take out the loan is what you’ll keep until it’s paid off (it changes with student loan refinancing).

Private Student Loan Interest Rates

These loans are funded by banks, credit unions, and other private lenders. As such, interest rates vary between the different lenders, and it’s worth shopping around whenever possible.

Private lenders usually offer both fixed-rate and variable-rate loans. Fixed-rate means that your interest rate remains the same over the life of the loan. It can neither increase nor decrease.

A variable interest rate, on the other hand, means that your interest rate can fluctuate with the market. Sometimes you can get lucky and have it go down for a period of time. However, the risk with variable-rate loans is that the interest rate goes up significantly and you end up paying much more than anticipated.

It’s important to keep this in mind when selecting a loan. It may be worthwhile to take a slightly higher fixed interest rate rather than assume the risks of a variable rate.

The Impact of COVID-19 on Student Loans

The interest rate cuts in 2020 had a major ripple effect on student loan interest rates. Despite the slowly recovering economy, interest rates remain lower than they’ve been in years, for federal student loans and private fixed-rate and variable interest rate loans. This is excellent news for student loan borrowers, and we hope to see these rates remain low in the coming year.

Currently, all federal student loan debt is frozen until Sept. 1, 2022. This means that rates are set to zero and no payments are due until that date. This loan repayment freeze originally began in March 2020 at the outset of the pandemic and has been extended six times at this point.

The Pros and Cons of Federal Student Loans vs. Private Student Loans

Let’s explore the pros and cons of the two major classes of student loans — federal and private. Neither is perfect, as we’ll see. Rather, each is suited to particular situations and types of borrowers.

Federal Student Loans

Pros

Flexible repayment plans. Federal loans are eligible for income-based repayment plans and loan forgiveness. These can be a huge help if you find yourself in a tough financial spot.
Much lower requirements. It’s almost always much easier to qualify for a federal loan than it is a private student loan, particularly if you want a good interest rate.
More affordable overall. Most of the time you’ll end up paying less on federal student loans than on a private student loan.

Cons

Origination fees. Federal student loans are subject to small origination fees, which aren’t part of a private student loan. This means your loan disbursements are usually going to be smaller.
Borrowing limits for undergraduates. This means some students may actually need to take out a small private loan in addition to the federal loan to cover their full college costs.
Can’t choose your loan servicer. Federal student loans are turned over to a loan servicer to handle the payments and administration of that loan. Some of them have sketchy reputations

Private Student Loans

Pros

Larger loans. If you know that you’ll need a certain amount of money, and it’s more than federal loans can offer, it might make more sense to simply go private.
Potentially lower rates. A private loan may have lower rates, particularly with student loan refinancing. That said, you’ll need an excellent credit score to get these lowest rates.
No origination fees. Private student loans don’t have the origination fees that come with federal student loans.

Cons

More difficult to qualify for. Private loans have stricter requirements, particularly around credit histories. Federal student loans are almost always easier to qualify for.
Generally higher interest rates. Unless your credit is outstanding, you’ll almost always get a better interest rate with a federal student loan.
Less flexibility in repayment options. Some private lenders are willing to work with borrowers on this, but there’s no law or regulation forcing them to, and thus, no guarantee.

Frequently Asked Questions (FAQs) About Student Loan Interest Rates

If you still have questions about student loan interest rates, don’t worry — we’ve got answers. Here are some of the most common questions.

What is the Interest Rate on Student Loans Right Now?

Student loan interest rates range from a low of 1.04% to a high of almost 15%. The rates depend on whether you’re looking at federal or private, which type of loan, which private lender you go with, your credit history, and more.

That said, here’s the quick bullet list:

Federal direct for undergraduate students: 3.34%
Federal unsubsidized for grad students: 5.28%
Federal Direct PLUS for parents and graduate students: 6.28%
Private fixed-rate loans: 3.34% to 14.99%
Private variable-rate loans: 1.04% to 11.99%

Will Student Loan Interest Rates Go Up in 2022?

This is a hard question to answer. They are expected to remain fairly low for the foreseeable future, but this can always change. For the 2021-2022 school year, federal rates did increase, but they are still a good bit lower than they were prior to the pandemic.

Are Student Loan Rates Dropping?

Rates increased for the 2021-2022 school year, but remain lower than they were prior to the COVID-19 pandemic. So while they didn’t drop this year, they have dropped significantly compared to a few years ago.

What’s the Difference Between a Subsidized and Unsubsidized Federal Student Loan

A subsidized federal student loan is one in which interest is paid by the U.S. Department of Education Department while you’re enrolled at least half-time in college. An unsubsidized loan, on the other hand, begins accruing interest immediately on disbursement, even if you’re still enrolled in school.

Subsidized student loans have a six-month grace period after graduating. During this time, no payments are due, and the Education Department continues to pay the interest on the loan.

An unsubsidized loan, on the other hand, begins accruing interest immediately on disbursement, even if you’re still enrolled in school. The student is responsible for this interest. Unsubsidized loans still have a six-month grace period after graduation, but interest continues to accrue during this time. The interest then capitalizes, which means it gets added to the original loan amount.

When Do Student Loan Interest Rates Start?

Federal student loan rates are set each spring and go into effect July 1, running until June 30 of the following year. At that point, the new interest rate will take effect.

What is Student Loan Refinancing?

Student loan refinancing is a way to decrease the amount of interest paid on your loan. Essentially, when you refinance, the new lender pays off your existing loan and gives you a new one with new terms.

Not everyone can refinance — there are fairly strict rules to evaluate your credit and income to determine eligibility. Additionally, you generally reset the length of your loan term when you refinance, so it can sometimes end up costing you more money.

Finally, while you can refinance a federal loan, you lose the extra benefits they come with, including income-based repayment options.

What is Income-based Repayment?

This is a special repayment option available to federal borrowers that lets you tailor your monthly payments to your income. These plans are typically based on a percentage of your monthly disposable income. This can be quite a bit lower than you’d otherwise pay. The tradeoff is that it can take much longer to pay off the loan.

Additionally, loans on these repayment plans are automatically forgiven after 20-25 years of payments.

Penny Hoarder contributor Dave Schafer has been writing professionally for nearly a decade, covering topics ranging from personal finance to software and consumer tech.

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Source: thepennyhoarder.com

May 9, 2022

How to Get Teacher Loan Forgiveness

Private school teachers can also qualify for the Perkins Loan Teacher Cancellation.
You meet the additional requirements, depending on whether you’re new to the profession and what grade level you teach.
The takeaway: You’d better enjoy teaching, because you’re going to have to do it for a while if you want to get your student loans wiped out.

Similar to the Teacher Loan Forgiveness program, Public Service Loan Forgiveness has quite a few hoops to jump through. But the good news is that the public service program does not restrict teachers to a specific school or subject matter.
The maximum ,500 award is only awarded to “highly qualified” teachers in special education or secondary mathematics or science. You can receive up to ,000 for other subject areas.
The standard repayment term for federal student loans is 10 years. If you have difficulty making payments, you have four main options within an income driven repayment plan (IDRP) for lowering them that take your income and expenses into account:

Teacher Student Loan Forgiveness Programs

This loan forgiveness program should be an obvious, easy choice, with the word “teacher” in the title. But there are some rigid requirements.

1. Teacher Loan Forgiveness (TLF)

The Perkins Loan Program ended on Sept. 30, 2017, so if you’re a recent graduate, this forgiveness may not be of much help. But if you have outstanding federal Perkins loans, you can still qualify for cancellation.

Which Loans Are Eligible?

You’ve attained your bachelor’s degree. Submit a completed Teacher Loan Forgiveness Program application. The head of the school(s) where you completed your service will have to complete the certification section, and you’ll need to submit separate applications for each loan servicer.

Pro Tip
The program was created in 2007 by former president George W. Bush to help public service workers, like teachers, get out of student loan debt. But the guidelines were so strict and confusing, few people actually qualified for forgiveness.

Contact your college’s financial aid or alumni office to find out about its forgiveness program options. For state and local programs, check out this directory from the American Federation of Teachers.

Who’s Eligible for Teacher Loan Forgiveness?

To qualify, you must either teach at a low-income school or teach one of the following subjects:
You have not had certification or licensure requirements waived on an emergency, temporary or provisional basis.
As a teacher, your employer matters, but the options are much more plentiful than the restrictive Teacher Loan Forgiveness program. Qualifying employers include federal, state, local or tribal government organizations and not-for-profit organizations that are tax-exempt.

How Much Can You Get?

You don’t have to teach all five years at the same school, but you’ll need verification from every school you taught at to reach the five-year minimum. You apply for teacher loan forgiveness after you’ve completed the teaching requirement.
Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.

Don’t know which loans you have? Log onto www.studentloans.gov: In the loan information list’s left-hand column, it will identify the type of loan. Or you can call the Department of Education and ask.
Start your AmeriCorps application here.
After completing your AmeriCorps term of service, you are eligible to receive the Segal AmeriCorps Education Award, which can be used to repay qualified federal student loans that includes Direct, Perkins Loans, Federal Consolidated Loans and others listed here.
They say that teaching is a calling. It’s just not typically a calling to money.

If you’re thinking about stacking the Teacher Loan Forgiveness with other forgiveness programs, you’ll be waiting a while. That’s because the forgiveness programs count your service sequentially, not simultaneously.

How to Apply

To apply, contact the school where you obtained the Perkins Loan to learn its specific rules.
And while there are a number of programs specifically designed to help teachers pay off student loans, a word of warning to anyone looking for a quick and easy fix. All of the teacher loan forgiveness programs require you to stick to a strict repayment schedule during a qualifying period when you must remain in the teaching profession.

2. Public Service Loan Forgiveness

We cover each of these repayment plans in more detail in this article, but know that these plans aren’t actually forgiveness programs. They’re repayment programs with a forgiveness option at the end. You’ll need to resubmit your income and family size every year to determine eligibility — and the forgiven portion is subject to federal taxes.
Although the Perkins Loan Teacher Cancellation is specifically designed for teachers, it’s also specifically for Perkins loans.
This award is subject to federal tax in the year each payment is made, making it taxable income.
Even with federally held student loan forbearance extended until Sept. 1, 2022, you shouldn’t ignore your student loan debt. In fact, this could be an opportune time to explore your possibilities before the freeze ends on interest and payments.

Which Loans Are Eligible?

Payments on all Direct loans enrolled in Pay As You Earn Repayment Plan (PAYE) and Income-Based Repayment Plan (IBR).
Payments made on all Direct loans that were not in PAYE and IBR are temporarily eligible to count toward forgiveness.
Perkins and Federal Family Education Loans (also known as FFEL) can qualify if they are consolidated, but previous payments may count though a limited PSLF waiver.

Who’s Eligible for Public Service Loan Forgiveness?

How to Apply

You don’t need to be a math teacher to realize that the ,000-plus average amount of student loans to get a bachelor’s degree would be tough to pay off on a teacher’s starting salary of ,163.

3. Perkins Loan Teacher Cancellation

If you are employed as a full-time teacher at a low-income school (you can find the list of eligible schools here) for five complete and consecutive academic years, you’re eligible for the program if at least one of those years was after the 1997-98 school year.
Let’s take a look at the different options for student loan forgiveness. They vary based on the types of loans you have, the amount that’s eligible for forgiveness, the school where you work and even the subject you teach.
Although ,000 to ,500 can put a dent in a debt, if your loans reach into the upper five digits (or six digits) — or you don’t meet the requirements of the Teacher Loan Forgiveness Program — you do have other options.
AmeriCorps programs place teachers in high-need urban and rural areas across the U.S. The positions are limited-term contracts but come with a full salary and other benefits.

Mathematics
Science
Foreign Languages
Special Education
Subject area that is facing a shortage of qualified teachers in your state

School librarians, guidance counselors, and other administrative staff are not considered teachers for the purposes of this loan forgiveness program.

How to Apply

The highly qualified requirements are as follows:

4. AmeriCorps

That means you can use both the teacher loan forgiveness and Public Service Loan Forgiveness to wipe out federal loans, for instance, but not for the same period of teaching service. So after working five years to qualify for the teacher loan forgiveness, you’ll need to tack on another 120 monthly payments to qualify for Public Service Loan Forgiveness.
Considering a recent study found that 55% of teachers say they plan to leave the profession earlier than they originally planned — and teaching in low-income districts can be extra challenging — you might be better off applying for just the Public Service Loan Forgiveness program if you’re looking to have a large amount of debt forgiven.
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But if you owe a smaller amount, help from the Teacher Loan Forgiveness program could help put a dent in your debt.

How to Apply

The availability of teacher loan forgiveness programs at the state and local level depends on where you live. If you’re struggling with student debt, you might be able to find a sympathetic ear at your alma mater or state agency.

5. State- and School- Forgiveness Programs

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You can use your award to repay defaulted federal student loans, as long as it qualifies.

How to Apply

That’s 15 years total — so if you graduate from college at 22, you’ll need to commit to teaching until you’re at least 37 years old. And there’s no guarantee you’ll receive forgiveness.

6. Income Driven Repayment Plans

This one isn’t specific to teachers, but it’s certainly applicable here.
If you are eligible, up to 100% of your loan may be canceled in increments for years of teaching service.

Income-Based Repayment Plan (IBR)
Income-Contingent Repayment Plan (ICR)
Pay as You Earn (PAYE)
Revised Pay as You Earn (RPAYE)

In 2021, the Department of Education announced an overhaul of the PSLF program, allowing previously non-qualifying payments to be counted toward forgiveness, and in some cases wiping out student loan balances.

An overview of a teacher teaching elementary school students. — Getty Images

Can You Stack Forgiveness Programs? Sort of.

If you’re employed by a government or non-profit, you’re eligible to qualify for loan forgiveness after 120 payments — that’s 10 years for you non-math teachers. You’ll need verification for each year of qualification.
You must have a full-time job in the public sector, and you’ll need 120 qualifying, non-consecutive loan payments (that’s 10 years worth).
You’ve received full state certification as a teacher.
Almost every state has at least one type of student loan forgiveness program that’s designed for those in public service fields.
Ready to stop worrying about money?
If you’re in default on a loan, you are not eligible for forgiveness unless you have made satisfactory repayment arrangements with the holder of the defaulted loan. <!–

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Login to the Federal Student Aid site and use the Public Service Loan Forgiveness tool to determine whether you, your loan and your employer qualify, as well as to fill out the form.

May 7, 2022

Guide to Grad PLUS Loans

Grad PLUS loans are federal student loans for graduate and professional students. Although Grad PLUS loans have higher interest rates and fees than some other types of federal student loans, they also have a major benefit — virtually no borrowing limits. You can borrow up to the full cost of attendance of your school, minus any other financial aid you’ve already received.

Read on for more on how Grad PLUS loans work, including their eligibility requirements, interest rates and repayment options.

What Are Grad PLUS Loans?

If you’re planning to attend a graduate or professional program, a Grad PLUS loan could help cover costs. Issued by the Department of Education, Grad PLUS loans are student loans designed for graduate and professional students.

PLUS loans are not the only federal loans available to you as a graduate student — you can also borrow Direct unsubsidized loans. Direct unsubsidized loans have lower interest rates and fees than PLUS loans, but they come with borrowing limits.

If you’ve hit your limit and need additional funding, a Grad PLUS loan could cover the gap. As mentioned above, you can borrow up to the full cost of attendance of your program, minus any other financial aid you’ve already gotten. This flexibility can be helpful for students who are attending pricey programs.

Recommended: How Do Student Loans Work? Guide to Student Loans

What Can Grad PLUS Loans Be Used for?

Grad PLUS loans can be used for tuition, fees and other education-related expenses. These expenses include,

• Housing

• Food

• Textbooks

• Computers and other supplies

• Study abroad expenses

• Transportation

• Childcare costs

A Grad PLUS loan will first be disbursed to your financial aid office, which will apply the funds toward tuition, fees, room and board, and any other school charges. The financial aid office will then send any remaining funds to you.

Recommended: What Can You Use Student Loans For?

Who Is Eligible for Grad PLUS Loans?

To be eligible for a Grad PLUS loan, you must be a graduate or professional student enrolled at least half-time at an eligible school. What’s more, your program must lead to a graduate or professional degree or certificate.

You’ll also need to meet the eligibility requirements for federal financial aid (more on this below), as well as submit the Free Application for Federal Student Aid (FAFSA®).

Typical Grad PLUS Loan Requirements

Besides being enrolled in an eligible graduate or professional program, you need to meet a few other requirements to take out a Grad PLUS loan:

Meet the Requirements for Federal Student Aid

Since Grad PLUS loans are part of the federal student aid program, you must be eligible for federal aid to borrow one. Here are some of the criteria you need to meet:

• Be a U.S. citizen or eligible noncitizen

• Have a valid Social Security number (with some exceptions)

• Have a high school diploma, General Educational Development (GED) certificate or other recognized equivalent

• Maintain satisfactory academic progress while in school

• Not already be in default on a federal student loan or owe money on a federal grant

If you’re a non-U.S. citizen or have an intellectual disability or criminal conviction, additional requirements might apply.

Submit the FAFSA

You’ll need to submit the FAFSA before you can borrow a Grad PLUS loan. After applying to grad school, you can submit this form, free of charge, on the Federal Student Aid website, with the myStudentAid mobile app or via the mail. Since the FAFSA only applies to a single academic year, you’ll need to submit it every year you’re in school and want to receive financial aid.

Complete the Grad PLUS Loan Application

Along with submitting the FAFSA, you’ll also need to fill out a separate application for the Grad PLUS loan. You can find and submit this application on the Federal Student Aid website, though some schools have separate processes. Your financial aid office can advise you on the steps you need to take.

If your application is approved, you’ll need to agree to the terms of the loan by signing a Master Promissory Note. If you haven’t borrowed a Grad PLUS loan before, you’ll also be required to complete student loan entrance counseling.

Not Have Adverse Credit History (or Apply With an Endorser)

While you don’t need outstanding credit to qualify for a Grad PLUS loan, you can’t have adverse credit. According to the Department of Education, you have adverse credit if one of the following applies to you:

• You have accounts with a total balance greater than $2,085 that are 90 or more days delinquent

• You’ve experienced a default, bankruptcy, repossession, foreclosure, wage garnishment or tax lien in the past five years

• You’ve had a charge-off or write-off of a federal student loan in the past five years

If you have adverse credit, you have two options:

• Appeal the decision due to extenuating circumstances. For example, you could provide documentation showing that you paid off a delinquent debt on your credit report.

• Apply with an endorser who does not have adverse credit. Your endorser will be responsible for repaying the loan if you fall behind on payments.

Grad PLUS Loans Interest Rates

Grad PLUS loans come with fixed interest rates that will remain the same over the life of your loan. They also have a disbursement fee, which is a percentage of your loan amount that gets deducted from your loan.

Congress sets rates and fees on federal student loans periodically. These are the current Grad PLUS loan interest rates and fees:

Interest Rate (for loans disbursed on or after July 1, 2021 and before July 1, 2022)	Disbursement Fee (for loans disbursed on or after Oct. 1, 2021, and before Oct. 1, 2022)
6.28%	4.228%

Repaying Your Grad PLUS Loans

Grad PLUS loans are eligible for a variety of federal repayment plans:

• Standard repayment plan, which involves fixed monthly payments over 10 years.

• Income-driven repayment, specifically Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Based Repayment or Income-Contingent Repayment. These plans adjust your monthly student loan payments to a percentage of your discretionary income while extending your loan terms to 20 or 25 years. If you’ve made on-time payments but still have a balance at the end of your term, it may be forgiven. The amount forgiven may be considered taxable income by the IRS.

• Extended repayment, which extends your repayment term to 25 years and lets you pay a fixed or graduated amount.

• Graduated repayment, which lowers your student loan payments in the beginning and increases them every two years. You’ll pay off your loan over 10 years, and your final payments won’t be more than three times greater than your initial payments.

Grad PLUS loans are also eligible for certain federal forgiveness programs, such as Public Service Loan Forgiveness.

Other Options to Pay for Grad School

Grad PLUS loans aren’t the only way to pay for graduate school. Here are some alternative options:

Direct Unsubsidized Loans

You can borrow up to $20,500 per year in Direct Unsubsidized loans as a graduate student with an aggregate loan limit of $138,500, including any loans you borrowed as an undergraduate.

Here are the interest rate and disbursement fee for graduate students:

Interest Rate (for loans disbursed on or after July 1, 2021 and before July 1, 2022)	Disbursement Fee (for loans disbursed on or after Oct. 1, 2020, and before Oct. 1, 2022)
5.28%	1.057%

Grants and Scholarships

Besides student loans, you can also pursue grants and scholarships for graduate school. You can find grants and scholarships from a variety of sources, including the Department of Education, your state, your school or a private organization. By earning grants and scholarships, you might not need to borrow as much in student loans.

Private Student Loans

You can also explore your options for private graduate student loans from banks, online lenders or credit unions. Some lenders offer interest rates that start lower than Graduate PLUS loan interest rates and don’t charge an origination fee.

Although private student loans aren’t eligible for federal repayment plans or programs, some lenders offer flexible repayment options or deferment if you need to pause payments. But, because private student loans aren’t required to offer the same borrower benefits as federal student loans, they are generally borrowed as a last resort option after all other sources of financing have been exhausted.

The Takeaway

If you’re looking for ways to pay for graduate school, a Grad PLUS loan could help. You can use this flexible loan to cover your school’s cost of attendance, as well as choose from a variety of federal repayment plans when it comes time to pay it back.

A Grad PLUS loan, however, might not be your most affordable borrowing option. Depending on your credit and other factors, it may be possible to find a private student loan with an even lower interest rate than a Grad PLUS loan.

SoFi offers private student loans with competitive rates, no fees and flexible repayment terms. Learn more about SoFi’s no-fee private student loans.

FAQ

What kind of loan is Grad PLUS?

The Grad PLUS loan is a federal graduate student loan issued by the Department of Education. It is designed specifically for graduate and professional students.

Is there a max on Grad PLUS loans?

There is virtually no limit on the amount you can borrow with a Grad PLUS loan. You can borrow up to your school’s cost of attendance, minus any other financial aid you’ve already received.

Can Grad PLUS loans be used for living expenses?

Yes, you can use Grad PLUS loans to cover your living expenses while at school. You must use your loan on education-related expenses, which can include housing, food, supplies, transportation and other costs related to attending school.

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.
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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Source: sofi.com

May 5, 2022

The Best Student Loans of May 2022

College costs are overwhelming for a lot of families. So students turn to student loans to cover them. Most students, following expert recommendations, start with federal student loans, but those aren’t always enough to cover costs.

When federal student loans don’t cut it, you can turn to private student loan lenders to fill in the gap.

Unlike federal student loans, private student loans offer a variety of options for interest rates, loan amounts and terms that could make picking one daunting. So we’ve pulled together a list of some of the best student loans available to make it easier for you to compare and vet your options.

Federal student loans have been in the news a lot lately as the U.S. Education Department has

Keep reading below the table for more details on every lender, plus all the information you need to find the college funding plan that’s right for you and your family.

Interest rates accurate as of late April 2022 and subject to change. Variable rates listed are margins added to a base rate such as LIBOR or SOFR, which could add around 0.30% to 1%.

Best Student Loans at a Glance

Lender	Variable APR with Autopay	Fixed APR with Autopay	Loans for
Credible	0.94% – 11.98%	3.02% – 14.08%	Undergrad and grad, refinancing	SEE DETAILS
Earnest	Starting at 0.94%	Starting at 2.99%	Undergrad and grad	SEE DETAILS
College Ave	0.94% – 11.98%	3.24% – 12.99%	Undergrad, grad and career training, refinancing	SEE DETAILS
Sallie Mae	1.13% – 11.23%	3.50% – 12.60%	Undergrad, grad and career training	SEE DETAILS
SoFi	1.05% – 11.78%	3.47% –11.16%	Undergrad and grad, refinancing	SEE DETAILS
Ascent	.47% – 11.31%	4.36% – 12.75%	Undergrad, grad, career training and bootcamp	SEE DETAILS
LendKey	Starting at 1.57%	Starting at 3.99%	Undergrad and grad, refinancing	SEE DETAILS
Citizens Bank	n/a	3.48% – 10.78%	Undergrad and grad, refinancing	SEE DETAILS
PNC Bank	Starting at 1.09%	Starting at 2.99%	Undergrad, grad and career training, refinancing	SEE DETAILS
Purefy	1.74% – 7.24%	2.43% – 7.94%	Refinancing	SEE DETAILS
Sparrow	0.99% – 11.98%	2.99% – 12.99%	Undergrad, grad and career training, refinancing	SEE DETAILS
Student Loan Authority	n/a	2.99% – 4.61%	Undergrad, grad and career training, refinancing	SEE DETAILS
Chicago Student Loans	n/a	7.53% – 8.85%	Undergrad (juniors and seniors)	SEE DETAILS
Funding U	n/a	7.49% – 12.99%	Undergrad	SEE DETAILS
Discover	1.79% – 11.09%	3.99% – 11.59%	Undergrad, grad and career training, refinancing	SEE DETAILS
Splash Financial	1.74 – 8.27%	1.99% – 8.27%	Undergrad, grad and career training, refinancing	SEE DETAILS

Credible

Best for Comparing Loan Rates

4.5 out of 5 Overall

Key Features

Compares rates from top lenders
See multiple offers without hard credit check
Variable APR as low as 0.94%

Through Credible’s loan marketplace, you can fill out an application to see pre-qualified rates for multiple lenders in one place. Select options that work for you, like deferred or interest-only payments while you’re in school, fixed or variable rates, and loan terms that fit your plan. Once you choose a loan offer, you can finish your application and sign your loan agreement with the lender directly.

Credible

Variable APR

0.94% – 11.98%

Fixed APR

3.02% – 14.08%

Loans for

Undergrad and grad, refinancing

Earnest

Best for Flexible Repayment Options

5 out of 5 Overall

Key Features

9-month grace period
Skip one payment/year
Pay monthly or every two weeks

Earnest offers an easy-to-use, modern platform to find loans for undergrad, grad school and professional degrees with a nine-month grace period before beginning repayment after school. Loans come with an option to defer one payment every 12 months with no extra fees or interest. Apply online, and get an offer within 72 hours.

Earnest

Variable APR

Starting at 0.94%

Fixed APR

Starting at 2.99%

Loans for

Undergrad and grad, refinancing

College Ave

Best for Affordable In-School Repayment

3.5 out of 5 Overall

Key Features

Variable APR as low as 0.94%
Parent and cosigned loans available
4 repayment options

College Ave is a mainstay in student loans and refinancing. Apply for loans to cover undergrad, grad and professional degrees, and career training programs. The online application is quick and easy, and borrowers tout the company’s customer service, so you’ll be on top of your loan from application to repayment. Choose how you repay while you’re in school to save money and fit your budget.

College Ave

Variable APR

0.94% – 11.98%

Fixed APR

3.24% – 12.99%

Loans for

Undergrad, grad and career training, refinancing

Sallie Mae

Best for College Financial Planning

2 out of 5 Overall

Key Features

Faster applications for returning borrower
Scholarships available
Credit cards and banking options

Sallie Mae is a private lender and platform for financial products for students. The business no longer originates or services federal loans, as it’s most known for. Apply for private student loans, credit cards and savings accounts designed for students. With Multi-Year Advantage, returning borrowers have fast applications and high approval rates to make it easier to get your money each year.

Sallie Mae

Variable APR

1.13% – 11.23%

Fixed APR

3.50% – 12.60%

Loans for

Undergrad, grad and career training

SoFI

Best for SoFi Banking Clients

4 out of 5 Overall

Key Features

No fees
Unemployment protection
Earn rewards to repay loans faster Summary

SoFi is well known for student loan refinancing, and it offers other types of loans including in-school student loans with no hidden fees. As a SoFi member, you get access to perks, including subscriptions to products like Grammarly, Evernote and Coursera, to support your education. With unemployment protection, you get forbearance on loans for up to three-month increments if you lose your job.

SoFi

Variable APR

1.05% – 11.78%

Fixed APR

3.47% –11.16%

Loans for

Undergrad and grad, refinancing

Ascent

Best for Graduated Repayment

4 out of 5 Overall

Key Features

Graduated repayment available
Hardship repayment options
Bootcamp loans available

Ascent offers student loans and scholarships for your full academic career. Apply online with no application fees to see your prequalified rates without a hard credit check. Use loans to pay for everything from a traditional undergrad or grad program to career training and even career-boosting bootcamps.

Ascent

Variable APR

1.47% – 11.31%

Fixed APR

4.36% – 12.75%

Loans for

Undergrad, grad, career training and bootcamp

LendKey

Best for Loan Reconnaissance

4 out of 5 Overall

Key Features

Work with community banks and CUs
Student loans and refinancing options
Rates as low as 1.57%

LendKey is a student loan servicer and a platform for finding the best student loan and refinancing options from partner community banks and credit unions. LendKey’s platform streamlines the process, so you get the benefit of working with a community-oriented institution without the headache of multiple application processes.

LendKey

Variable APR

Starting at 1.57%

Fixed APR

Starting at 3.99%

Loans for

Undergrad and grad, refinancing

Citizens Bank

Best for Citizens Bank Customers

3 out of 5 Overall

Key Features

Loyalty discounts
Cosigner release option
Multi-Year Approval

Citizens Bank is an established financial institution with more than 40 years of experience providing student loans and other financial services. With multi year approval, you can get approved for new loans year after year with a faster application and no hard credit check. Citizens Bank customers can get an interest rate discount up to 0.25 percentage points.

Citizens Banks

Variable APR

n/a

Fixed APR

3.48% – 10.78%

Loans for

Undergrad and grad, refinancing

PNC

Best for Undergraduate Loans

2.5 out of 5 Overall

Key Features

Established traditional bank
Cosigner release option
Student loans and refinancing options

PNC Bank is one of the largest banks in the United States, with nearly 200 years of experience in financial services. Student loans and refinancing are among its vast services. The PNC Solution Loan is designed specifically for undergraduates, to bridge the gap when federal student loans don’t cover all your expenses. It also offers graduate and professional loans.

PNC Bank

Variable APR

Starting at 1.09%

Fixed APR

Starting at 2.99%

Loans for

Undergrad, grad and career training, refinancing

Purefy

Best for Refinancing Student Loans

3 out of 5 Overall

Key Features

Student and parent loan refinancing
Compare multiple lenders
No hard credit check

Purefy is for anyone out of school, repaying student loans and looking for ways to save money. Use the platform to compare student loan refinancing options from multiple lenders side-by-side. The platform is free to use, and you can see prequalified rates in minutes. You can refinance private or federal loans through its partner lenders.

Purefy

Variable APR

1.74% – 7.24%

Fixed APR

2.43% – 7.94%

Loans for

Refinancing

Sparrow

Best for Easy Student Loan Repayment

4 out of 5 Overall

Key Features

Compare offers from multiple lenders
App to automate loan repayment
Manage private and federal loans

Sparrow is a platform for student loans, refinancing and repayment in one place. You can fill out a single application to see prequalified offers from multiple partner lenders for private loans or refinancing. Then use the app to manage and automate repayment of your private and federal student loans in one place.

Sparrow

Variable APR

0.99% – 11.98%

Fixed APR

2.99% – 12.99%

Loans for

Undergrad, grad and career training, refinancing

Rhode Island Student Loan Authority

Best for Income-Driven Repayment

5 out of 5 Overall

Key Features

Income-based repayment available
Fixed interest rates
Less-than-halftime students eligible

RISLA is a nonprofit organization offering student loans and refinancing for borrowers all over the U.S. Its loans have more borrower protections than most private student loans: You have income-driven repayment options, a fixed interest rate and two repayment terms to choose from (10 or 15 years). Limited loan forgiveness is even available for students who complete internships.

Rhode Island Student Loan Authority

Variable APR

n/a

Fixed APR

2.99% – 4.61%

Loans for

Undergrad, grad and career training, refinancing

Chicago Student Loans

Best for Equitable Lending

4.5 out of 5 Overall

Key Features

Merit-based approval and interest rates
No cosigner needed
Income-based repayment options

Chicago Student Loans by A.M. Money works with limited schools around the Midwest, but if your school is eligible, this is a great option for equitable lending. Approval and interest rates are determined based on your academic achievement, not your credit or income. And income-based repayment plans are available if you can’t afford your monthly payment.

Chicago Student Loans

Variable APR

n/a

Fix APR

7.53% – 8.85%

Loans for

Undergrad (juniors and seniors)

Funding U

Best for Merit-Based Lending

5 out of 5 Overall

Key Features

Approval by GPA and non-credit factors
No cosigner needed
More than 1,000 eligible schools

Funding U makes undergraduate loans based on a student’s GPA, not their family’s credit history. It uses a credit check to set interest rates, but also factors in your GPA and year in school — the rate goes down as you progress nearer to graduation! Funding U works with more than 1,460 nonprofit colleges and universities.

Funding U

Variable APR

n/a

Fixed APR

7.49% – 12.99%

Loans for

Undergrad

Discover

Best for Rewards for Good Grades

3.5 out of 5 Overall

Key Features

No origination or late fees
Cash reward for good grades
Variable APR as low as 1.79%

In addition to its full suite of financial services, Discover offers student loans for undergrads, grad students and professional degrees with no origination or late fees. You’ll get rewarded for good grades: Get a 1% cash reward for each new loan if you have a GPA of at least 3.0 for the term(s) the loan covers.

Discover

Variable APR

1.79% – 11.09%

Fixed APR

3.99% – 11.59%

Loans for

Undergrad, grad and career training, refinancing

Splash Financial

Best for Refinancing Undergrad and Med School Loans

4.5 out of 5 Overall

Key Features

Compare offers from multiple lenders
No origination fees or prepayment penalties
Exclusive interest rates from partner lenders

Splash Financial lets you compare in-school student loans and student loan refinancing (and personal loans) from multiple lenders with a simple and quick online application. In addition to its search function, Splash partners with its lenders to offer exclusive interest rates — with fixed rates as low as 1.99% — to help you get the best deal possible.

Splash Financial

Variable APR

1.74 – 8.27%

Fixed APR

1.99% – 8.27%

Loans for

Undergrad, grad and career training, refinancing

Types of Student Loans

The first thing you need to know before applying for any student loans is the difference between federal and private student loans. These two types of loans are treated differently and offer significantly different options for repayment and forgiveness down the line, so know what you’re signing up for before you borrow.

Federal Student Loans

Federal student loans are backed by the U.S. government and make up the vast majority of student loans borrowed every year in the country.

Application: You apply for federal loans along with other types of federal student aid for college through the Free Application for Federal Student Aid, a form you fill out every year to demonstrate your family’s financial situation. The U.S. Department of Education (ED) approves basic undergraduate loans and grants based on financial need, not creditworthiness, so students can apply for federal financial aid without a cosigner.

Types of loans: The government makes four types of student loans: Direct Subsidized, Direct Unsubsidized, Direct PLUS for parents or graduate students, and Federal Perkins Loans for students with exceptional financial need. It also awards grants and work study awards based on financial need. PLUS loans are granted based on creditworthiness, but might still be easier to get than some private loans.

Interest rates: Federal student loan interest rates are standard and not based on a borrower’s credit history. Congress sets them each year for loans disbursed that year, and you keep that rate for the life of your loan. For example, the interest rate for 2021 was 3.73% for Direct undergraduate loans, 5.28% for graduate student loans and 6.28% for PLUS loans.

Repayment plans: The required repayment for federal student loans starts six months after leaving school (or going less than half time), and the standard repayment plan splits monthly payments evenly over 10 years. Subsidized loans don’t accrue interest while you’re in school, while unsubsidized loans do.

Federal student loans are originated and serviced by private institutions, but they’re backed by a guarantee from the federal government, so ED sets repayment terms. You can opt into a graduated payment plan or income-driven repayment, both which would extend your time to repay and could give you a more affordable monthly payment (as little as $0).

Only federal loans are eligible for forgiveness under programs like Public Service Loan Forgiveness and for national forbearance periods like we’ve seen during the pandemic. The pause on loan payback has been extended six times since the start of the pandemic.

Refinancing options: Even though you receive one lump payment (if you get a refund) each semester, you might have multiple student loans to your name. You can combine them with a Direct Consolidation Loan, a student loan consolidation option creates one balance and one monthly payment, and sets the interest rate at the average of all the loans. This isn’t a money-saving step, but could make repayment simpler.

You can also refinance federal student loans using a private refinancing option, which could save you money if you have strong credit and can keep up with payments. This would pay off your federal loan balances and replace them with a private loan. It removes the repayment and forgiveness options that come with federal loans.

Private Student Loans

Private student loans are consumer loans made by private banks, credit unions and financial institutions. They’re treated differently from other types of private loans, but don’t come with as much flexibility as federal loans.

Application: You apply for private student loans directly with the lender or servicer providing the loan. Lenders approve loans based on creditworthiness, just like other credit products, so you have to have a strong credit history or apply with a creditworthy cosigner to be approved. Most (but not all) lenders include an option to release the cosigner after a few years of steady payments.

Types of loans: Private student loan lenders typically offer student loans for undergraduate students, graduate students and professional degrees. Some also offer loans for career training or alternative education like bootcamps. The loans all offer the same basic terms, but interest rates and loan amounts usually vary based on the degree covered.

Interest rates: Private student loan interest rates are set based on creditworthiness and can range from less than 1% to 12% or more depending on the prime rate. Fixed rates are set when you take out a loan and stay the same for the life of the loan, while variable interest rates fluctuate up and down when the Fed adjusts the prime rate.

Repayment plans: Private lenders don’t offer the same amount of protection in repayment as the federal government, but they usually offer a variety of repayment options so you can choose a plan that helps you save money without being overwhelmed by payments. You usually get to choose whether to pay off interest and/or principal while in school, or defer all payments until six months or more after school.

Many private lenders offer forbearance options of a few months at a time, so you can pause payments due to financial hardship without defaulting on your loan. They don’t, however, offer income-driven repayment, so your monthly payment is unaffected by your ability to pay it.

Private student loans aren’t eligible for forgiveness under federal plans, but you might be able to discharge them in bankruptcy under limited circumstances.

Refinancing options: If your financial situation improves, you can apply to refinance your student loans with the same or a different private lender. This pays off your existing loans and replaces them with a new loan with better terms, like a lower interest rate or lower monthly payments.

Should You Take out a Federal or Private Student Loan?

Nearly every expert will tell you to use private student loans as your last resort to pay for school. First exhaust free funding, like grants, scholarships and work study. Then take on federal student loans. Then, if your costs aren’t covered, take out private student loans to fill the gap.

That’s because private loans are the riskiest of all those options.

Federal student loans may be subsidized to save on interest, and they come with flexible repayment plans that offer relief when your income is low. And they’re eligible for forgiveness for student loan borrowers who qualify. Most private loans don’t have those options.

However, private student loans could come with significantly lower interest rates than federal student loans if you have good credit. Federal loans come with standard rates between 3% and 7% and don’t reward good credit (or punish bad credit).

After exhausting free funding, the most ideal route is to borrow a subsidized federal loan — which won’t accrue interest while you’re in school — then consider refinancing once the repayment period starts, you’ve built a strong credit history and feel confident in your ability to make monthly payments for the term of the new loan.

Even most private student loan lenders encourage borrowers to look into federal funding before taking out a private loan while you’re in school. They’re generally designed to fill gaps for students who aren’t eligible for enough in federal student loans to cover their costs to attend college.

Student Loan Costs to Consider

When you evaluate private student loan offers, you’ll probably focus on the interest rate, because that has a significant impact on the long-term cost of the loan. But there are other costs to consider.

Before accepting any loan offer or signing the agreement, make sure you know how much you’ll pay (if anything) in these common costs:

APR: Annual percentage rate is commonly called the interest rate (though they’re a little different). It’s usually the most prominently advertised feature of student loans. Student loan interest rates tend to fall between 3% and 11% and can be fixed or variable — the latter means they’ll change with the prime rate. A higher credit score can get you a lower interest rate and vice versa.
Origination fee: Some lenders charge a fee to receive your loan, though that’s less common with student loans than other types of loans. Origination fees are usually around 2% or 3% of the loan amount. They come out of the amount disbursed to the school, so you likely won’t notice them unless you’re very particular about math.
Late fee: Most loan agreements come with a fee for late payments, usually a percentage of the payment due. Many student loan lenders are doing away with late fees and building in options for flexible repayment, so shop around to compare your options!

What Is a Cosigner?

A cosigner is someone who shares the responsibility of a loan with the borrower. If you — the borrower — can’t qualify for a loan on your own because of bad credit or no credit, you could apply with a cosigner with good credit to qualify.

You receive the funds, but you both bear responsibility for repaying the loan, and repayment or default impacts both credit scores.

Cosigners are common for private student loans, because many people entering college are young and have almost no credit history. You can cosign with a parent, guardian or other creditworthy person, who basically guarantees the loan in case you don’t repay.

Student loans often come with an option for cosigner release, so the cosigner doesn’t have to stay tied to the loan for years after the student’s left school and gone off on their own. Cosigners can usually be released after around 12 to 36 months of on-time payments, with proof of the borrower’s income.

Who Can Take out a Private Student Loan?

Any student can usually apply for a student loan from a private lender, but creditworthiness determines whether you’ll be approved.

Lenders generally have basic requirements for student loans, as well, including:

You must be enrolled at least half-time in a degree-granting institution.
You must be the age of majority in your state (usually 18 or 19).
You must be a U.S. citizen or resident.

Some lenders make exceptions for these, though. For example, Ascent offers a Bootcamp Loan, which wouldn’t come with the enrollment requirement. Some lenders also make loans for international students who aren’t U.S. residents.

How to Get a Private Student Loan

Follow these steps to apply for a private student loan.

Weigh your options. Before turning to private loans, fill out a FAFSA to see your options for federal financial aid. This doesn’t commit you to taking out a federal loan, and it has no affect on your credit score; it just gives you all the information you need to make a decision. If federal aid won’t cover your costs, look into private loans.

Find a cosigner. If you don’t have strong credit, get a cosigner on board before you apply. Use a site like Credit Sesame or Credit Karma to check your credit score and history for free to see where you stand.

Get pre-qualified. Lenders let you fill out a little information about yourself — usually all online — and run a soft credit check to give you an idea of the interest rate and loan terms you could qualify for. That lets you compare offers before submitting to a hard credit inquiry that impacts your score. Marketplaces like Credible and LendKey let you see and compare several pre-qualified offers with one application.

Choose a lender. Choose the loan offer that looks like the best fit for you, and finish your application with the lender. You can usually do this part all online, too. The lender will run a hard credit check and might need more information from you, like proof of income. You could get a decision as soon as the same day or after a few days, depending on the lender’s process.
Accept your loan. Once approved, you can review and sign your loan agreement — remember to note any fees! — and accept your funds. Lenders send student loan funds directly to your school to pay for tuition and fees, and the school will send you a refund for any extra amount.

Frequently Asked Questions (FAQs) About Student Loans

We’ve rounded up the answers to some of the most common questions about where to get the best private student loans.

What Type of Loan is the Best Value to Students?

Which student loan options are best for you depends on your family’s financial situation. Private student loans can be an optimal option financially, because of potentially low interest rates and short repayment terms. But they’re only available to students with good credit or creditworthy cosigners. Federal student loans are available based on financial need and come with a host of repayment and forgiveness options that could protect low-income borrowers in the long run.

What Type of Student Loan Has the Lowest Interest Rate?

Private student loans can have interest rates as low as 1% but might be as high as 12% or more, depending on your credit. Federal loan rates are set by Congress for all borrowers and fall around 3% to 5% for undergraduate loans. If you (or your cosigner) have good credit, a private student loan could get you the lowest interest rate.

What is the Biggest Student Loan You Can Get?

The size of your student loan depends on what kind of loan you take out. For private student loans, it’s determined by your credit and the term of the loan you want. Some private lenders set caps on student loan amounts, and some will lend up to your full cost of attendance. For federal loans, your loan amount is determined based on your cost of attendance and expected family contribution. If you demonstrate financial need, your federal loan might go beyond tuition, and you could receive a refund to help cover living expenses. Undergrads can borrow a max of between $5,500 and $12,500 each academic year, and grad students can borrow up to $20,500.

Contributor Dana Miranda is a Certified Educator in Personal Finance® who has written about work and money for publications including Forbes, The New York Times, CNBC, Insider, NextAdvisor and Inc. Magazine.

Source: thepennyhoarder.com

May 4, 2022

American Education Services (AES) Review 2022

American Education Services (AES) is a private and federal student loan servicer that handles student loans from a wide variety of lenders. If you have a Federal Family Education Loan, there’s a good chance it’s serviced through AES.

You don’t typically get to choose your loan servicers. However, if you ended up with AES and have questions, you’re in the right place. Let’s walk through everything there is to know about American Education Services.

What Is AES?

AES, or American Education Services, is a student loan servicer. Student loan servicers are companies that handle the repayment and administration of student loans for lenders. They don’t typically offer loans themselves.

AES was founded way back in 1963 to help service the Federal Family Education Loan Program (FFELP) and has been operating ever since. These days, it services both private student loans and federal student loans to millions of students at thousands of schools.

In addition to loan servicing, AES also provides several other financial services, including loan guarantees, financial aid processing, and various student aid and outreach programs.

How Does AES Work?

American Education Services doesn’t offer loans itself. Instead, as a student loan processor, it handles the billing and various other services around student loans. AES works with both federal student loan providers, such as the U.S. Department of Education, as well as private lenders.

In practice, that means that if your loan is handled by American Education Services, it could be either federal or private. This has implications for your repayment options since federal loans like the Federal Family Education Loan or Direct Subsidized Loans have special payment plans available.

In either case, though, you’ll receive your statements from AES, and then make your loan payments to them each month. The company offers a number of payment options, which we’ll discuss later in the article.

AES Services at a Glance

Service	Detail	Good to Know
Choice of Payment Methods	6 ways to pay	Lower interest for direct debit payment
Payment Reduction Options	Depends on loan type	More help for federal loans
Deferment and Forbearance	Options available	Severe hardship required
Other AES Services	Financial aid information	Form library access

AES offers most of the basics you’ll find with student loan servicers. They’ll take your payment in a number of ways, and will generally work with you if you need a little help making your payments.

Let’s walk through each of these services in detail and see how AES stacks up.

Choice of Payment Methods

As mentioned above, you can make your AES student loan payments with a variety of methods: direct debit, online payments, payments via the American Education Services mobile app, payment over the phone, payment by mail, and even payment via third-party bill pay services. Let’s run through each of these methods:

Direct Debit Payment

Direct debit payments are automated monthly payments on a schedule. Simply set this up on the American Education Services website and the amount of your monthly student loan payment will be automatically debited each month, even if the due date falls on a weekend or holiday.

This is handy because you don’t need to worry about remembering to make the payment. These payment plans also sometimes qualify for a small interest rate reduction (up to 0.25%), which is always nice.

Online Payment

If you don’t like the automated nature of the direct debit option, you can still pay electronically online on your own terms. You’ll need to input your bank account details, but you can save this information for future monthly payments, so you don’t need to input it every time.

The disadvantage of these online payments is that you need to remember to actually log in and make the payment. However, that’s also the big advantage — not everyone is comfortable with automatic withdrawals, and some pay schedules aren’t regular enough to make them realistic. This gives you another relatively simple option.

Payment Via Mobile App

If you prefer to handle things on your smartphone, that’s also an option with American Education Services. In fact, you may prefer this option simply because the AES mobile app is surprisingly easy to use. Just log in (you can use FaceID or a fingerprint scanner if your phone has one), head to the “Pay” tab, and enter your details. You can also use the app to view your student loan details and get an idea of where your account stands.

Finally, the app makes it easy to set up automatic payments. This is handy if you want to worry about your payments less or take advantage of that interest rate reduction.

Payment By Phone

If you prefer to make your student loan payments over the phone (or don’t have a choice), that’s an option with AES. Call 1-800-233-0557 and provide the requested information. You’ll need your AES account number and date of birth to identify yourself, along with your bank account number and routing number for the payment. Fortunately, you can save the bank information, so you’ll only need to provide it once.

The caveat with AES phone payments is that your payment will be spread evenly across all of the student loan debt on your account, so you’ll have to make sure you pay enough to cover the minimum required payments. If you only want to pay on a single loan, you’ll have to use the online method.

Payment Via Mail

If you’re feeling really old-fashioned, you can mail your payment in via check or money order. Make the check out to American Education Services and address it to:

American Education Services, P.O. Box 65093, Baltimore, MD 21264-5093

The check should include your AES account number.

Third-party Bill Pay

Finally, you can make your student loan payments through a bill pay service, such as those offered by many banks. If you’re going to go this route for making your payments, just note that AES can’t offer any interest rate reductions or other incentives for payments made through third-party services. It’s also important to make sure the bill pay service has the correct address for AES.

Payment Reduction Options

If you can’t make your monthly payments, or things are a little tight, you have options. However, which options you have available depends on whether you have private student loans or federal student loans. Unfortunately, there’s not much AES can do about this.

If your American Education Services student loans are through private lenders, you can contact AES directly to discuss repayment options. It’s not guaranteed, but sometimes you can negotiate a payment plan similar to the federal options, which we’ll get into next. At the very least, you might be able to put a pause on payments until you can get into better financial shape (see the section on deferment and forbearance below). It never hurts to ask.

Student loan borrowers with a federal loan have a lot more options. The federal Standard Repayment Plan is 10 years of fixed payments. However, federal loans are eligible for a number of repayment plans, including the following:

Graduated Repayment Plan

The Graduated Repayment Plan lets student loan borrowers make smaller payments towards the beginning of their loan repayment period, with payments increasing over time. The idea is that your income is more likely to be lower when you first start repaying, whereas over time the payments increase to match your income.

Income-Based Repayment (IBR)

The IBR program bases your payments around your income and family size. Depending on when you secured the loan, your payment will be either 10% or 15% of your discretionary income.

Additionally, the loan will be eligible for forgiveness after 20 or 25 years (again, depending on when the loan was secured). This is an excellent option for families with lower incomes.

Revised Pay As You Earn Repayment Plan (REPAYE)

The REPAYE plan is somewhat similar to the IBR plan, but with fewer restrictions. With this plan, you’ll make payments of 10% of your discretionary income.

This plan also offers loan forgiveness after a period of time — 20 years for an undergraduate student loan, and 25 years for graduate or professional student loans.

Income-Contingent Repayment (ICR)

ICR plans allow you to pay either 20% of your discretionary income or what you would pay on a fixed, 12-year repayment plan — whichever is lower. Federal student loans under an ICR plan are eligible for forgiveness after 25 years.

Deferment and Forbearance Options

American Education Services student loans are also eligible for deferment or forbearance. These two options are available for all federal student loans and some private student loans.

Deferment

This is a process where payments are temporarily stopped on your loan account. Your loan may or may not accrue interest during the deferment period, depending on whether it’s federally subsidized.

Forbearance

This is similar to deferment, but you are always responsible for the interest that accrues during forbearance.

Qualifying for either deferment or forbearance generally requires that you have a significant financial hardship, such as unemployment, and that you’re enrolled at least half-time as a student. If you have a private student loan, you may have additional requirements.

Other AES Services

AES offers a number of other services, including financial aid services for schools and various solutions for lenders, such as a library of common forms.

AES Review: The Pros and Cons

These pros and cons can help you understand more about AES since you don’t really have a choice in selecting a loan servicer.

Pros

Lots of repayment options. Student loans can be repaid in nearly any fashion you can imagine, from automatic debits to payments via a mobile app.
A solid mobile app. Speaking of mobile apps, the AES app is actually quite good. It allows you to get a quick overview of your accounts and make easy payments from anywhere.
A long track record. American Education Services has been around for a long time (1963). While this doesn’t guarantee anything, it can still be an indicator of trustworthiness.

Cons

No real choice in the matter. If you have AES and like them, great. If you don’t, your only option is to consolidate or refinance your student loans and hope for a different loan servicer.
Complaints. AES’s parent company was the subject of a class-action lawsuit in 2021. Plenty of borrowers will have no issues with AES, but it’s worth being aware of past issues.

Frequently Asked Questions About American Education Services (AES)

If you still have questions about AES, don’t worry — we’ve got answers.

Is AES Legit?

Yes, AES is legit. In fact, it’s a huge loan servicer that serves millions of students and thousands of schools around the country, including federal student loans. If you’re concerned because you don’t recognize the name, you can relax!

Is AES a Government Student Loan?

AES is technically not a loan at all. It’s a loan servicer, which means it handles repayment and administration of student loans provided by other lenders.

That said, the loan you’re paying on through AES could be either government or private, depending on where it originated. If it was originally a federal student loan, that won’t change, even though you’re paying on it through AES. The same is true for private student loans.

Can My AES Loans Be Forgiven?

The short answer is “it depends.” If you have a federal student loan and qualify for one of the income-based repayment options, like REPAYE or IBR, your loan will be forgiven after 20 or 25 years of payments.

And if you work in the public sector, you may qualify for the Public Service Loan Forgiveness (PSLF) program. Public Service Loan Forgiveness essentially offers loan forgiveness after a shorter period of payments than available with the income-based plans alone.

Is My AES Student Loan Private or Federal?

Your AES loan will be either federal or private, depending on where it originated. If your original loan was a federal loan, it will remain federal (with all the attending benefits) with AES. Similarly, if your loan came from a private lender, it will be private with AES.

This is because AES doesn’t actually provide the loans — it’s a loan servicer, which means it basically handles the payments and administration of the loan for another company.

How Do I Know If My Student Loan Is Federal or Private?

If you’re not sure whether you have a federal or private student loan, the simplest way to find out is to check the federal student aid website: studentaid.gov. This site has information on all federal student loans, so if yours is federal, it’ll show up here. The site will also provide student loan details like the servicer and outstanding balance.

You can also check your billing statement or simply contact AES and ask them directly — they’ll be able to tell you whether your loan is private or federal.

Penny Hoarder contributor Dave Schafer has been writing professionally for nearly a decade, covering topics ranging from personal finance to software and consumer tech.

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Source: thepennyhoarder.com

May 2, 2022

Similarities and Differences Between Financial Aid vs Student Loans

Figuring out how to pay for school can be stressful, so it’s important to compare financial aid vs student loans so that you can reduce your financial burden as much as possible and find out what’s right for you.

When college financial aid isn’t enough, people use federal or private student loans to help cover costs. Private student loans can also close gaps between what you qualify for and how much you need. We’ll compare student loans vs financial aid and explore some features that can help you determine what makes the most sense for your financial situation.

What Is Financial Aid?

Financial aid is funding that is available to students to help make college or career school more affordable. College financial aid comes in several forms and helps students pay for higher education expenses, including tuition and fees, room and board, books and supplies and transportation.

Here are several types of financial aid available to students:

• Scholarships: A scholarship is a form of financial aid that’s awarded to students to help pay for school. Scholarships are typically awarded based on academic or athletic achievement, community involvement, job experience, field of study, financial need and more.

• Grants: A grant is a form of financial aid that doesn’t have to be repaid and is generally based on financial need.

• Federal work-study programs: The federal work-study program offers funds for part-time employment to help eligible college students in financial need.

• Federal student loans: Student loans are borrowed money from the federal government or private lenders to help pay for college.

Financial aid can come from federal, state, school, and private sources. Federal Student Aid, a part of the U.S. Department of Education, is the largest provider of student financial aid in the U.S. Federal aid is distributed to 13 million students each year, totaling $120 billion.

Recommended: Am I Eligible for Work-Study?

What Are Student Loans?

A student loan is money borrowed from the government or a private lender to help pay for school with the expectation that you will pay it back. Like most other types of loans, the amount borrowed will accrue interest over time. Student loans can be used on school-related expenses including tuition, room and board, and other school supplies.

Loans are different from grants or scholarships and it’s essential that you understand the differences between financial aid vs student loans. If you receive a grant or a scholarship, you typically don’t have to pay that money back. Student loans are also different from work-study programs, where students in financial need to work part-time jobs to earn money to help pay for school.

It’s common for college students to take out student loans to finance their education, but you should first compare federal vs private student loans. Federal student loans offer some borrower benefits that make them preferable to private student loans.

Federal Student Loans

Federal student loans are loans that are backed by the U.S. government. Terms and conditions of the loan are set by the federal government and include several benefits, such as fixed interest rates and income-driven repayment plans. To qualify, students must fill out the Free Application for Federal Student Aid (FAFSA®) every year that they want to receive federal student loans. The FAFSA also allows students to apply for federal aid including scholarships, grants, and work-study. Colleges may also use the information provided on the FAFSA to determine school-specific aid awards.

There are four types of federal student loans available:

• Direct Subsidized Loans are student loans for undergrads in financial need to help pay for expenses related to higher education. The government covers the accruing interest on this type of loan while the borrower is enrolled in school at least half-time and during the loan’s six month grace period after graduation.

• Direct Unsubsidized Loans are made to eligible undergraduate, graduate and professional students. Eligibility is not based on financial need. Borrowers are responsible for all accrued interest on this type of loan.

• Direct PLUS Loans are made to graduate or professional students, known as the Grad PLUS loan, or parents of dependent undergraduate students, known as the Parent PLUS loan. These loans are meant to help pay for education expenses not covered by other financial aid.

• Direct Consolidation Loans allow students to combine all eligible federal student loans into a single loan.

Private Student Loans

Private student loans can also be used to help pay for college. Private student loans are offered by banks, credit unions, and online lenders. Understanding how private student loans work is essential before borrowing. While federal student loans are generally the first option potential student borrowers pursue, private student loans may be an option to consider for borrowers who are trying to pay for college without financial aid. Unlike federal student loans, which have terms and interest rates set by the federal government, private lenders set their own and conditions that vary from lender to lender.

Private student loans are also credit-based. The lender will review an applicant’s credit history, income and debt, and whether they’re enrolled in a qualified educational program. Applicants who may lack credit history, or have a less than glowing credit score may consider applying with a cosigner to improve their chances of approval.

Unlike federal student loans, interest rates can be fixed or variable. A fixed interest rate stays the same for the life of the loan but a variable interest rate may change. The interest rate a borrower qualifies for will also depend on the lender as well as the borrower’s creditworthiness.

Not all private student loans are the same. Because of this, it’s important that you understand the annual percentage rates (APRs) and repayment terms before taking on the loan.

Financial Aid vs Student Loans Compared

When comparing financial aid vs student loans, you need to be aware of the similarities and differences between financial aid vs student loans. Here are some key comparisons.

Similarities	Differences
They can both be used to help fund education-related expenses.	Financial aid doesn’t typically need to be repaid. Student loans must be repaid within a given loan term, plus interest.
FAFSA® must be filled out for financial aid and federal student loans.	Financial aid and student loans may be paid out differently.
Financial aid and student loans have certain eligibility requirements.	Some financial aid, like scholarships, may be awarded based on merit. Federal student loans can be both need and non-need based. Lending criteria on private student loans is determined by the lender.

Similarities

Financial aid and student loans are both used to help fund education-related expenses, like tuition, room and board, books and classroom supplies, and transportation. Financial aid and student loans backed by the federal government also require students to fill out FAFSA® for each year that they want to receive federal student loans or federal financial aid. Financial aid and student loans also have some sort of eligibility requirements, whether that be based on financial need, merit or creditworthiness.

Differences

The biggest difference between financial aid vs student loans is whether or not you need to pay back the money you are given to help pay for college. Financial aid is either money that doesn’t need to be paid back, known as gift aid, or earned through a federal work-study program.

Student loans must be repaid within a given loan term. Not only are students expected to pay back student loans, but there’s typically interest that accrues over the life of the loan.

There may also be differences in how financial aid and student loans are paid out to the student. Private student loans are usually paid in one lump sum at the start of each school year or semester; however, you may not receive the full amount of a scholarship award upfront. Government grants and loans are generally split into at least two disbursements and If you have a work-study job, you’ll be paid at least once a month.

Some private student loans may also come with greater flexibility and offer more money than financial aid.

Recommended: Gift Aid vs Self Help Aid For College

Pros and Cons of Financial Aid

Pros of Financial Aid

• Money received through financial aid does not typically have to be repaid.

• Potential to decrease future debt by minimizing the amount you have to borrow.

• Opens up new opportunities for many students to attend a better school than they could without financial assistance.

• Allows students to focus on their education instead of worrying about paying tuition.

Cons of Financial Aid

• Most financial aid does not cover all school-related costs.

• Scholarships, grants, and work-study programs can be highly competitive.

• You may have to maintain certain standards to meet eligibility requirements during each semester.

• There’s less flexibility on how you can spend funds.

Pros and Cons of Student Loans

Pros of Student Loans

• Student loans offer financial support for those who would otherwise be unable to attend college.

• You don’t need any credit history for federal student loans and you can use a creditworthy cosigner for private student loans.

• Student loans can be used for things beyond tuition, room and board, and books.

• Paying off student loans may help you build credit.

Cons of Student Loans

• You start off with debt after graduating from college.

• Student loans can be expensive.

• Defaulting on student loans can negatively impact your credit score.

• If you borrowed a private student loan, the interest rate may be variable.

Private Student Loans from SoFi

Financial aid and student loans financially support students by relieving some of the financial burden that’s often associated with higher education. When financial aid isn’t enough, students may seek private student loans to help cover their college costs. Although private student loans don’t come with as many perks as federal student loans, and are generally borrowers only as a last resort option as a result, they can help fill in the gaps between what you qualify for and how much you need.

Private student loans from SoFi can help serve as a supplement to federal aid. SoFi student loans offer plenty of benefits, such as no origination fees, no application fees, no late fees, and no insufficient fund fees. You can find out if you pre-qualify within minutes.

Learn more about private student loan options available with SoFi.

FAQ

Does FAFSA loan or grant money?

FAFSA is an application that you fill out in order to determine your eligibility for receiving a federal loan or federal student aid such as grants and scholarships. While a federal student loan is borrowed money that must be repaid after graduation, funds received through grants, scholarships, and work-study programs do not need to be repaid.

Can you get financial aid and student loans at the same time?

Yes. If you apply for financial aid at your school, you may be offered loans as part of your school’s financial aid offer to help cover the remaining costs.

Do scholarships count as financial aid?

Yes, scholarships are a type of financial aid that is considered gift aid and typically do not have to be repaid.

Photo credit: iStock/Altayb

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SoFi Private Student Loans
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SOPS0222005

Source: sofi.com

1. Set financial goals

2. Live on a budget

Budgeting is a marathon

Budget your way

3. Track your spending

4. Avoid overspending

It’s not about money

5. Negotiate your bills

6. Pay off debt

Avoid future debt

7. Plan ahead

8. Try a savings challenge to stretch your money

9. Plan your meals

10. Stretch your money by ditching your cable

11. Get a programmable thermostat

Double your savings

12. Use an app

13. Get a side hustle

Monetize your passion

The bottom line

Will Parent Plus Loans Be Included in Student Loan Forgiveness?

Parent Student Loan Forgiveness Program

Income-Contingent Repayment (ICR)

Public Service Loan Forgiveness (PSLF)

Refinance Parent Plus Loans

Transfer Parent Plus Student Loan to Student

Alternatives to Student Loan Forgiveness Parent Plus

Student Loan Forgiveness Death of Parent

State Parent PLUS Student Loan Forgiveness Programs

Disability

Bankruptcy

Closed School Discharge

Borrower Defense

Explore Private Student Loan Options for Parents

The Takeaway

Adjust Your Withholding

Start a Money Journal

Call Your Credit Card Provider

Switch to a Lower Student Loan Payment

Lower your Bills

Examine your Transactions

Start a Budget

Close Old Accounts

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What happens when you marry someone with student loan debt?

Is one spouse responsible for the other’s student loans?

Does getting married affect student loan repayment?

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Federal Student Loan Interest Rates

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Teacher Student Loan Forgiveness Programs

1. Teacher Loan Forgiveness (TLF)

Which Loans Are Eligible?

Who’s Eligible for Teacher Loan Forgiveness?

How Much Can You Get?

How to Apply

2. Public Service Loan Forgiveness

Which Loans Are Eligible?

Who’s Eligible for Public Service Loan Forgiveness?

How to Apply

3. Perkins Loan Teacher Cancellation

How to Apply

4. AmeriCorps

How to Apply

5. State- and School- Forgiveness Programs

How to Apply

6. Income Driven Repayment Plans