Many students take out loans to pay for college. While federal student loans don’t require a credit check, private student loans typically do. And, since students often don’t have much credit history, they typically require a cosigner. A cosigner can be a parent but it doesn’t have to be. You can ask other family members, friends, or even mentors to cosign your student loan.
Since a cosigner will be responsible for paying back your loan in the event you’re unable to, it’s important to choose someone you feel comfortable entering a financial agreement with. A cosigner with good credit and high income could result in lower interest rates on your loans.
Read on for a simple, step-by-step guide on how to get someone to cosign your student loan.
How to Ask Someone to Cosign Your Private Student Loan
You may have someone in mind who would make a good cosigner. The problem is, how do you ask someone to cosign a loan? It’s a big ask, and approaching the topic can be intimidating. Not to worry. What follows are some tips that can help ensure you come to the conversation prepared.
Recommended: Avoidable Mistakes for Choosing Student Loan Cosigners
1. Research Your Financial Aid Options First
Before you ask someone to cosign a private student loan, it’s a good idea to explore all of your college funding options. Around 85% of students receive some form of financial aid to pay for college.
Filling out the Free Application for Federal Student Aid, or FAFSA, will give you access to any federal student aid you may be eligible to receive. This might include grants, work-study, federal subsidized loans, federal unsubsidized student loans, and even private scholarships. Completing the FAFSA is free, and it’ll also show potential cosigners that you’ve done your due diligence and have tapped all your available options to finance your education before asking for help.
Recommended: 11 Strategies for Paying for College and Other Expenses
2. Explain Why You Need a Cosigner
Once you’ve decided who you want to ask to be your cosigner, it’s important to come to the table with a clear explanation of why you need a cosigner and what costs the loan will cover. You’ll want to be prepared to share details on your own savings, debts, and credit history. This shows a cosigner why you need help and what kind of risk they would be taking on.
Providing a clear picture of what you have and what you need demonstrates that you’re taking your education and financial goals seriously. Having followed tip #1, you’ll be in a position to show the funding gap between your own funds plus any aid you’ve received and the cost of attendance at your chosen college.
3. Outline Your Plan for Repaying the Loan
When asking someone to cosign a student loan, it’s a good idea to let them know that you have a plan for repayment and exactly what that plan is. Some private lenders allow you to defer making payments until after graduation, while others require you start making interest-only payments while still in school. Either way, you’ll want to have an idea for how you will make those payments on your own.
Failing to make payments on time each month will impact both you and your cosigner, so it’s a good idea to also make a backup plan in case something doesn’t work out. This might be getting a part-time job in any field if you find that it takes longer than expected to get hired in your chosen field.
Demonstrating your plan for repayment can help build your potential cosigner’s confidence and help them feel more comfortable about entering into a cosigner agreement with you.
Recommended: 6 Strategies to Pay Off Student Loans Quickly
4. Make Sure They Understand What They’re Agreeing To
Before moving forward to a written agreement, it’s a good idea to go over the requirements and responsibilities for being a cosigner. For starters, your cosigner must meet a minimum credit score and demonstrate a certain minimum monthly income. The exact requirements will depend on the lender.
You’ll also want to let them know that, as a cosigner, they have a legal obligation to make sure the loan is repaid, and that any late or missed payments on the loan can impact both your and their credit scores.
While these risks can feel intimidating to bring up, outlining your plan to avoid loan default can help address their concerns and show you’re taking the commitment seriously.
Recommended: Ca$h Course: A Student’s Guide to Money
5. Make a Plan for a Cosigner Release
A cosigner release effectively removes a cosigner from a loan, freeing them from any continued responsibility for repayment of your loan. Private lenders may offer the option for a cosigner release if you, at a certain point down the road, meet certain credit requirements and have a strong track record of on-time payments.
Discussing a plan or timeline for when your cosigner will be released from their responsibilities shows that you’re being considerate of the risks of being a cosigner and the impact it can have on their finances. While you may not have the strongest qualifications as a borrower today, your creditworthiness can build over time as you consistently make on-time loan payments.
You might also have the option of refinancing your student loan and, in the process, releasing your cosigner from the original loan agreement.
6. Give Them Time to Think
Cosigning a loan is a serious commitment and whomever you ask may need some time to think over the decision. For this reason, it’s a good idea to approach your potential cosigner early on so you have plenty of time to talk through the agreement and, if necessary, pursue another option.
Handling Potential Concerns and Objections
Cosigners will likely have questions and potential concerns about how the agreement could impact their finances, as well as your relationship. After you’ve made your pitch, it’s important to hear them out and be open to their input to reach an agreement that works for you both.
If a cosigner has objections that you can’t resolve, it may be time to seek out a different cosigner.
Formalizing the Cosigner Agreement
If the person you ask to cosign your loan says “yes,” it’s time to find the right private student loan for your needs. It’s generally a good idea to shop around and compare rates and terms from different lenders, including banks, credit unions, and online lenders. Some lenders allow you to pre-qualify for a student loan online, without impacting your (or your cosigner’s) credit score. This allows you to compare offers, go over rates and terms with your cosigner, and decide which loan is the best fit.
When you officially apply for the loan, you and your cosigner will need to provide a number of financial documents to the lender, so be sure to give your cosigner time to gather all their paperwork.
Repaying the Loan Responsibly
When you take out a private student loan, you’ll typically have a choice of several repayment plans. Which one you choose can have a significant impact on both your monthly payment and total cost of the loan. Options may include:
• Immediate repayment This means you make full monthly payments while still in school. Doing so will minimize the interest you pay, resulting in the greatest savings.
• Interest-only repayment Here, you’ll pay only the interest on your loan while you’re still in school. Payments will be lower than immediate repayment but you won’t chip away at your loan balance (or save as much on interest).
• Partial interest repayment This involves making a fixed monthly payment while still in school that only covers part of the interest you owe. Payments will be lower than interest-only plan but your loan balance will grow.
• Full deferment Here, you’ll pay nothing while you’re enrolled in school. During this time, though, your loan balance grows.
Once you choose a plan, you’ll want to create a budget for the minimum payment you owe each month. It’s also a good idea to enroll in autopay, to ensure you never miss a payment. Some lenders also offer a rate discount if you enroll in autopay.
After you’ve graduated and your finances allow, you may be able to make extra principal-only payments — this can help lower the total interest you pay over the life of the loan.
The Takeaway
If you need a cosigner on your student loan, you have options. Whether you choose a parent, other family member, friend, or mentor, it’s important to be transparent about the requirements and risks that go into being a cosigner.
Coming to the conversation prepared can build trust and confidence with potential cosigners and put you on the path to funding your education.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
How do you convince someone to cosign a loan?
You’ll want to be transparent, as well as fully prepared for the conversation. Explain how the loan will support your long-term educational and financial goals, how you plan to make future loan repayments, and why you are a trustworthy borrower.
Who can I ask to be my cosigner?
It’s common for students to use parents or family members as cosigners, but there are no rules stating that your cosigner must be a relative. You can also ask mentors or family friends who are invested in your success. Just keep in mind that a cosigner will need to meet the lender’s financial and credit requirements.
Can I hire someone to be a cosigner?
There are businesses that advertise online that they will cosign your student loans for a fee, but borrower beware. These are often scams in which the “cosigner” requests cash payment in advance, then disappears. Or, the business might be legitimate but will require you to give them a portion of the loan in exchange for cosigning. Generally, it’s not worth the risk or cost.
What percentage of student loans are cosigned?
Roughly 92% of undergraduate private loans are cosigned. About 66% of graduate school loans from private lenders require a cosigner.
How do I assess my creditworthiness before seeking a cosigner?
To assess your creditworthiness, you’ll want to check your credit score and take a look at your credit reports.
You can often access your credit score for free through your bank or credit card company (check your statements on log into your online account). You can access your credit reports from the three main consumer credit bureaus (Equifax, Experian, and TransUnion) for free at AnnualCreditReport.com.
Photo credit: iStock/NoSystem images
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
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-criteria 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.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Editor’s Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.
While on the work grind at the office, you get an email from the HR department, inviting you down to pay them a visit. Uh-oh. What could possibly be up? You’re a rock star on the job, so you cannot imagine what the trouble could be.
The good news: you’re not getting fired. The bad news: they tell you that part of your wages are going to be garnished in order to pay back your outstanding school loans.
What Is Student Loan Wage Garnishment?
Student loan wage garnishment is a tough thing to face; what makes it doubly troublesome is the official letter from the U.S. Department of Education that notifies your employer that a percentage of your paycheck will now go directly to paying back your outstanding student loan balances.
This may be something that would be a big enough bummer when you’re the only one who knows about it. When your employer is let in on the secret, and ordered by the government to reconfigure your paycheck, the awkwardness knows no bounds.
Student loan wage garnishment does not make it easy for you or your employer . Your company’s payroll department generally executes (and sometimes calculates) the student loan garnishment amount, and forwards the payments to the correct agency or creditor. In some cases, your employer can be held liable for the full amount or a portion thereof for failure to comply with the garnishment. This can include interest, court fees, and legal costs.
If it’s any consolation, you would not be alone in this situation. Let’s start with the macro: according toCNBC , more than one million people default on their student loans each year. By the year 2023, nearly 40% of borrowers are expected to default on their student loans. Outstanding debt in the U.S. has tripled over the last decade and now exceeds $1.5 trillion. That number far exceeds the traditional debt of autos and credit cards.
Now for the micro: according to a study by the ADP Research Institute , 7.2% of employees had their wages garnished in 2013 (the latest research we could find on this). Of that total, 2.9% of those garnishments were from student loan and court-ordered consumer debt garnishment.
Defaulting on your student loan is not ideal. We’re going to share some details on federal student loan garnishment, and how you can avoid defaulting on your loans. 💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.
How Does Federal Student Loan Garnishment Work
Your wages can’t be garnished out of nowhere. It starts with your loan becoming delinquent, which happens the first day after you miss a payment. Your loan will remain delinquent until you pay back everything you owe.
If you are more than 90 days delinquent on your payment, your loan servicer reports the missed payments to the three national credit bureaus (Equifax, Experian, and TransUnion). This will negatively affect your credit, as payment history makes up 35% of your score.
Eventually, if you still fail to repay your debt, the government may resort to garnishing your wages and/or withholding your tax refund, which they can do without a court order. Legally, they can garnish up to 15% of your disposable pay. Disposable income is calculated by taking your gross income, and then subtracting your tax obligations and other withholdings such as Social Security, Medicare, state tax, city/local tax, health insurance premiums, and involuntary retirement or pension plans.
The good news is that there is a temporary exception to this process. To help financially vulnerable borrowers transition to making their student loan payments after an automatic, three-year pause that ended in October, the Biden administration implemented an “on-ramp” period. From Oct. 1, 2023 through Sept. 30, 2024, borrowers who miss payments will not be considered delinquent or in default, have missed payments reported to the credit bureaus, or have their loans referred to collections agencies.
Ways To Help Prevent Your Student Loan From Becoming Delinquent
If you are concerned about wage garnishment for your federal student loans, there are proactive steps you can take to keep your account from becoming delinquent in the first place:
Scheduling automatic payments. You can have the monthly obligation automatically and electronically deducted from your checking or savings account.
Building an emergency savings fund. You can save at least six months of backup funds that you can use specifically to make your monthly payments. This may come in handy should you be without income for a time.
Ways To Help Prevent Your Student Loans From Going Into Default
Based on your financial circumstances, there are a few options available that may allow you to make your student loan payments more affordable or even put them on a temporary hold:
Income-Driven Repayment (IDR) Plans: With these plans, your student loan payments are adjusted based on your discretionary income. Depending on the plan you choose, the government typically extends your repayment terms and readjusts your monthly payment, and may eventually forgive the balance of your loan. The newest IDR plan, the SAVE Plan, will provide the lowest monthly payments once it’s fully implemented in July 2024.
Forbearance or Deferment: If making payments is becoming or has become nearly impossible, you can ask your lender to defer your payments or request forbearance. If they agree and you qualify, you can delay your payments and avoid default.
Student Loan Refinancing vs Consolidation
If student loan wage garnishment is the nightmare that comes true, here are two options that may be able to stop it: consolidating or refinancing your student loans. First, know the difference between the two (and it’s a pretty big one):
When you refinance student loans, you’re actually paying off your existing loans with a new loan from a private lender. In this process, you can possibly reduce your payments and make them more affordable. (You may pay more interest over the life of the loan if you refinance with an extended term.) Or you may be able to lower your interest rate. However, you also will lose out on certain benefits that come with federal student loans, like deferment and forbearance, and lose your eligibility for all other federal student loan programs.
When you consolidate your federal student loans with the federal government, you essentially “bind” them all together into one, big loan. Sounds like a plan, but there can be a few downsides; this could result in you paying more in interest over the life of your new, consolidated loan because the interest rate on your consolidated federal loan will be the weighted average of all your loans, rounded to the nearest eighth of 1%. You can also only consolidate your federal loans under a Direct Consolidation Loan, which has its own requirements if you’re already in default, and isn’t available for private student loans.
Consolidating a Defaulted Loan
According to the U.S. Department of Education, if you want to consolidate a defaulted loan, you must make “satisfactory repayment arrangements” on the student loan with your current loan servicer before you consolidate.
If you want to consolidate a defaulted loan that is being collected through garnishment of your wages, or that is being collected in accordance with a court order after a judgment was obtained against you, you may only do so if the garnishment order has been lifted or the judgment has been vacated.
Refinancing Your Student Loans
You may be able to combine your private and federal loans into one brand-new, private refinanced loan.
You may be a good candidate for student loan refinancing if you have a steady income, a consistent history of on-time debt payments, and you don’t have need for federal student loan benefits—among other important personal financial factors. (When you refinance your federal loans with a private lender, you can no longer access any federal loan benefits.)
A lender will most likely offer you a few choices for your refinanced student loan: fixed and variable interest rates, as well as a variety of repayment terms (this is often based on your credit history and current financial situation). If you qualify for refinancing, your new loan should (hopefully) come with a new interest rate or a new loan term that can lower your monthly payments.(You may pay more interest over the life of the loan if you refinance with an extended term.)
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
Student Loan Refinancing If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. (You may pay more interest over the life of the loan if you refinance with an extended term.) Please note that once you refinance federal student loans, you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as the SAVE Plan, or extended repayment plans.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial markets rallied worldwide today as a massive plan to remove bad mortgage debt from the balance sheets of troubled institutions was introduced by Treasury Secretary Henry Paulson.
Last night, Paulson held discussions with Fed Chairman Ben Bernanke and SEC Chairman Chris Cox about taking a “comprehensive approach” to solve the ongoing credit crisis.
After addressing problems on a case-by-case basis over the past few weeks, such as the bailout of Fannie and Freddie and AIG, it became clear that a more systematic plan would be necessary to maintain market stability.
“The underlying weakness in our financial system today is the illiquid mortgage assets that have lost value as the housing correction has proceeded,” said Paulson in prepared remarks posted on the Treasury website. “These illiquid assets are choking off the flow of credit that is so vitally important to our economy.”
“When the financial system works as it should, money and capital flow to and from households and businesses to pay for home loans, school loans and investments that create jobs. As illiquid mortgage assets block the system, the clogging of our financial markets has the potential to have significant effects on our financial system and our economy.”
The so-called troubled asset relief program currently being mulled over aims to be the “ultimate taxpayer protection,” though it will involve a “significant investment” from taxpayer dollars.
“I am convinced that this bold approach will cost American families far less than the alternative – a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion,” said Paulson.
While the new plan is being worked on over the weekend, Treasury is taking immediate steps to provide relief to the mortgage market.
First, Fannie and Freddie will boost their purchases of mortgage-backed securities, and second, Treasury will expand its MBS purchase program to increase available capital for new home loans.
Additionally, a temporary guaranty program for the U.S. money market mutual fund industry has been established and a ban on short selling is in place on 799 financial companies until October 2.
As for the millions of delinquent borrowers, banks receiving assistance may need to endorse judicial loan modifications and allow bankruptcy judges to facilitate refinances on primary residences in return.
When you make the decision to continue your higher education beyond an undergraduate degree, you likely think about the payoff: Will the education, such as a Master’s degree in Business Administration (MBA), help you secure a well-paying job? Will you be able to quickly pay off your graduate loan?
If you’re wondering what you can do with an MBA, you’re not alone. While there are many different jobs for MBA graduates, the important thing is identifying which you’re interested in so you know you’ve got a promising career ahead of you on the other side of that MBA program.
What the MBA Prepares You For
Because an MBA exposes you to many different aspects of business, from finance to marketing to economics, it can help you qualify for a wide range of business-related MBA careers. Because you aren’t focused in a single niche, you can apply the leadership, accounting, and communication skills you have learned in your MBA program to your future career, no matter what industry it’s in.
Some prestigious MBA programs (that also come with a hefty price tag) may have an alumni network that can help you find a good job right after graduation. But even if you’ve opted for a more affordable MBA program, the simple fact of you possessing an MBA may be appealing to employers and could help you command a higher salary than you could have earned with just an undergraduate degree. 💡 Quick Tip: Private student loans offer fixed or variable interest rates. So you can get a loan that fits your budget.
The Current Job Market
Despite recent layoffs in a variety of industries, particularly in technology, there are still a lot of industries that are growing and even the ones doing the layoffs are still hiring MBAs. Finding a great job, however, may require using your networks to your best advantage. Human resource experts also advise MBA grads to highlight skills that are especially marketable today, including training in artificial intelligence, project management, business analytics, and supply chain management.
Recommended: Is Getting A Degree In Marketing Worth It?
The Best Jobs for MBA Grads
This leads us back to that question: What jobs can I get with an MBA?
The good news is, no matter what the economic climate and your particular skill set, there are typically many jobs for MBA graduates.
Jobs in Finance
If you aced your finance, statistics, and accounting courses, your future may lie in finance. For someone with an MBA, you’ve got several possibilities.
A financial advisor provides financial planning and advice for clients, and may specialize in certain niches, like estate planning or high net worth clients. Financial advisors may continue to pursue additional certifications or licenses. The median salary for financial advisors is approximately $94,170.
A financial analyst is attuned to the stock market and may make forecasts about the behavior or stocks and bonds for clients. The median salary for a financial analyst is around $81,730.
If you enjoy managing a business’ finances, becoming an accountant may be a good fit. You may be in charge of accounts receivable and payable, as well as filing taxes for a business. The median salary for an accountant is around $77,250.
If you have a little technical skill, a budget analyst might be a good fit. You’ll prepare financial reports, evaluate budgets, and help the business manage its finances. Median salary for a budget analyst falls around $79,940.
Recommended: 9 Top Online MBA Programs
Jobs in Marketing
If numbers aren’t your thing, but you love the idea of promoting a brand and connecting with its customers, a career in marketing could be up your alley.
A marketing manager is involved in overseeing marketing campaigns for a company. You may be involved in the strategy, and/or actual execution of tools like social media, content, and advertising. Median salary for marketing managers is around $135,030.
If you want to get more hands-on with digital marketing, consider applying to become a digital media strategist. This role taps into analytics and data to build marketing and ad campaigns to build relationships with customers. The average salary for a digital media strategist is approximately $62,947.
If you’re a born salesperson, being a sales manager may come naturally to you. They develop sales and promotions and oversee sales teams for a company. The median salary for sales managers is about $130,600.
Jobs in Management
If you’re highly organized and have leadership skills, a career in management might be a good fit, particularly if you also have technical skills.
Management consultants often work in technology fields, and help companies solve problems or facilitate transitions. The average salary for management consultants is around $99,655.
Or you could become an operations manager, who is in charge of making sure a company runs smoothly. This role could be involved in finance, supply chain, hiring, and overall strategy, and the median salary is roughly $97,970.
HR managers are also involved in the company’s operations, though from the human resources perspective. This role recruits, interviews, and hires employees, as well as onboards them and trains them. The average HR Manager salary is around $116,792.
If you like keeping projects running smoothly, you might make a great project manager. You’ll be involved in assigning tasks to team members, communicating with company leaders, and facilitating the success of a project. Average salaries fall around $87,129.
Another option is a product manager, who is involved in creating and marketing new products. The average salary for this role is $114,028.
Jobs in Technology
If your skill set lies in IT, there are several jobs to consider once you’ve graduated.
As IT manager, your role would be to manage and upkeep a business’ IT hardware and software, as well as build strategies and protocols for IT security. The median salary is around $159,010.
Business intelligence analysts assess business data and trends to find ways that a business can become more efficient and profitable. The average salary for a business intelligence analyst is around $87,267.
Recommended: Tips on How to Pay for MBA School
How to Stand Out from other MBAs
Now that you have a sense of your career options post-graduation, the question is how to get hired.
Start by networking. There likely are organizations in your community that cater to a general business audience, or even a specific niche, like IT professionals. Your university may have an organization to connect students with employers.
As you build relationships with people through these groups, you can put feelers out for potential jobs. Remember: Networking isn’t about what you can get out of it but rather what you can give. So contribute what you can and connect people when appropriate, and the favor may be returned.
Update your LinkedIn profile to reflect your education as well as any internships or organizations you have been involved with. It’s also a great place to search for jobs and connect with people who work at companies you’re interested in.
Finding a job will take time, so start early and have patience. Have a few versions of your cover letter that you can modify, and customize the letter you send specific to the job and company you’re applying with.
If you make it to the interview phase, send a handwritten thank you note to the person who interviewed you. This is not only polite, but might help you stand out, since few people send physical mail anymore.
After all your hard work, you will likely be rewarded with a career that allows you to utilize the knowledge you gleaned in your MBA program, and ideally offers a competitive salary that can help you repay any MBA loans you took out to finance your education. 💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.
The Takeaway
Getting your MBA can open doors for your career. MBA programs aim to teach students a broad range of skills that can help them thrive in a wide range of roles and industries, including tech, HR, marketing, and more.
MBA programs can be pricey. If federal aid, scholarships, and savings aren’t enough to fill the funding gap, private school loans could be one option to consider.
Private student loans are available through private lenders, including banks, credit unions, and online lenders. Loan limits vary from lender to lender, but you can often get up to the total cost of attendance, which gives you more borrowing power than with the federal government. Interest rates vary depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.
Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that automatically come with federal student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
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-criteria 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.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Inside: Are you moving into your first apartment? Planning a move can be daunting, but with this checklist, everything will be ready for your bed and bathroom you arrive. From a mattress, pots and towels to cleaning supplies and furniture, this list has it all. This is a huge deal!
Moving into your first apartment is an exciting time!
You’re finally out on your own, and you get to decorate and furnish your space however you want.
But before you can start shopping for all the cute home décor, there’s one very important task that needs to be taken care of first: creating a First Apartment Checklist.
This comprehensive checklist will ensure that you don’t forget any essential items when furnishing your new place. From kitchen supplies to bathroom necessities, we’ve got you covered.
So what are you waiting for? Let’s get started!
My First Apartment Mistakes
Moving into your first apartment indeed marks an exciting milestone in life.
However, it is also a moment of awakening when realizing that filling the apartment with all the necessities is not child’s play. My lesson learned the hard way.
It requires great planning and acute mindfulness of one’s budget. While the thrill of setting up your own place can easily lead to overspending, it’s important to keep the budget in check and be judicious about your purchases.
Here are some aspects to consider:
It’s easy to forget that there’s a huge list of big and small things you’ll still need to buy to fully equip your space. However, the keyword here is “need” and not “want”. I should have been better at differentiating between what is absolutely necessary for your immediate living situations and what can be procured later.
Define what you can spend right away by considering the moving costs and other related expenses. After setting the budget, the next most important step is to stick with it. You will be tempted to stretch your limit, but remember that financial restraint is key.
Moreover, remember that you don’t need to get everything right away, certain things can wait. Spend wisely, and stick to immediate needs. You might be surprised to find out that some items you thought were essential, in fact, can be comfortably lived without.
Your home is meant to give comfort, not financial stress.
The above statement is a lesson that stick with you for a long while. Keeping track of your expenses and making wise decisions can help establish your first apartment without breaking the bank.
Learn is $5000 enough to move out?
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Big Items for Your First Apartment Checklist
You’re finally out of your parents’ house and ready to start your own life. Congrats!
This is an important step when you want to move out at 18.
Moving into a new place is both exciting and daunting. To help you make sure you have everything you need for your new digs, we’ve put together a first apartment checklist of all the big items you’ll need to buy.
This is where to focus your money or look to find free items.
1. Mattress
Living in your first apartment?
Do not underestimate the importance of a good mattress.
It’s the foundation for quality sleep, which is crucial for your health and daily performance. Investing in one is non-negotiable even if budget is a constraint.
Personally, this. is the one item I would say to buy new! Thankfully you can find affordable mattresses now.
2. Bed Frame & Headboard
You may be tempted to skip the bed frame in your first apartment, but it’s a key piece that offers myriad benefits.
In full honesty, I didn’t get a headboard for my mattress until well after I was married. But, it was one small thing that made me happy.
Popular bed frame options vary in price from $60 for a simple metal frame to over $200 for wooden or upholstered models. Make sure to evaluate your needs and budget before buying.
3. Couch
Your first apartment is exciting, and the right couch can really set the tone. It’s not only a seating arrangement but also a place for relaxing, entertaining, and unleashing your personality.
When setting up your first apartment, you might be conflicted about whether to buy a new couch or look for a used one. Here are some factors to consider:
For those living by themselves:
A new couch can be a significant investment, but it is worth the cost if you value personal comfort, hygiene, and aesthetics.
Utilize discount stores to find quality furniture that is within your budget. A new couch often comes with warranties or protection plans that can give you peace of mind for any potential repairs or damages.
Investigate measurements and delivery options thoroughly to ensure your new couch comfortably fits your apartment layout.
If you are planning to live with a roommate:
You can consider getting a used couch. This is a great way to cut costs during a time when budgeting and saving money are important.
To make sure the couch you’re acquiring is clean and pest-free, buy or get it for free from trusted sources. Friends or family are often the best people to approach when looking for used furniture.
Look into garage sales or online platforms like Craigslist for options. However, always inspect the couch thoroughly before purchasing it from these sources.
Whether you choose new or used, ensure that the couch fulfills your needs.
4. End Tables and Lamps
End tables and lamps are essentials you need in your first apartment. They offer functionality along with a touch of class to your space.
There are many reasons why they should be on every first apartment checklist.
Versatility: Side tables can be used in various ways, from serving as a coffee holder, providing a place for books and magazines, or showcasing photo frames and indoor plants. It can also function as an extension of your workspace when you need to create an impromptu office setup.
Convenience: Having a side table next to your bed or sofa allows you to have important items within easy reach. This may include your phone charger, eyeglasses, or remote controls.
Decorative Value: Side tables contribute to the aesthetic appeal of your living space. They come in different styles, shapes, and designs that can complement various types of interior décor themes.
More than likely with lamps, you will notice where you need them the most after you move. So, it is okay to wait and buy them.
5. Dining Room Table
Your first apartment isn’t complete without a dining room table. It’s the multi-tasking hero of your living space, essential for meals, socializing, and possibly working or studying.
Finding the right dining room table for your apartment can be a fun and rewarding experience. However, it may be daunting for some, given the myriad of options available in the market.
Here’s a step-by-step guide to help you find your ideal fit:
Determine the Size Needed: The first step in finding the right dining room table is to measure the space it will occupy. Knowing the size helps narrow down the options and ensures a comfortable fit. Consider the number of people you plan on hosting on a regular basis – that should dictate the size of the table you need.
Consider the Shape: Dining tables come in various shapes, including square, rectangle, round, and oval. Identifying the shape that suits your space and lifestyle is crucial. Rectangular tables are the most common, but circular ones are great for maintaining an intimate dining experience, while an oval one can be a middle ground between a square and a round table.
Decide on Style: Whether you lean more towards a modern, contemporary, or rustic look, there are countless styles of dining tables to choose from. Ensure that the style of the table resonates with the rest of your home decor for a harmonious look.
Remember, choosing the right dining table is a balance of both form and function. Considering these aspects will surely help you find the dining room table that fits your lifestyle and space.
A good friend of mine had great luck finding a dining room table at a Restore resale shop. Something to definitely check out!
6. Kitchenware
Moving into your first apartment often comes with the challenge of equipping your kitchen efficiently.
To help guide you in making thoughtful purchases without breaking the bank, here are some important kitchen items you should consider investing in.
Basic Cooking Equipment: A Starter kitchen at the bare minimum requires at least two pots and a frying pan. These should be supplemented with necessary cooking utensils like a ladle, spatula, whisk, etc. You also need a high-quality knife set, at least one cutting board, and measuring cups and spoons to help you prepare and portion your meals accurately.
Food Storage & Serving Items: Get microwave-safe food storage containers to store leftovers efficiently. Additionally, invest in a good set of plates, bowls, glasses, and coffee mugs.
Countertop Appliances: While these can be a bit costly, consider getting a microwave, an InstantPot, and a coffee maker. These can vastly simplify and speed up your daily meal prep.
These are the basic items for a minimalistic kitchen.
7. Patio Furniture
Patio furniture can be an excellent cost-effective addition to your first apartment. Often overlooked, patio furniture can provide advantages for a first-time tenant:
Getting patio furniture as hand-me-downs or buying used ones can save you lots of expenses.
Plus patio furniture can be easily refurbished or painted to match your apartment’s interior design. You can showcase your creativity and add a personal touch without spending much.
8. Grill
One must-have in your first apartment is undoubtedly a grill. Nothing beats the flavor of a good grill and it’s perfect for friendly gatherings or quiet evenings.
Having a grill can add a sense of fun and adventure to your living situation. It allows for new culinary experiences and outdoor entertaining, especially during warmer months when you can have a delightful barbecue party in your yard or balcony.
Grilling can also act as a social catalyst. Whether it’s a relaxed summer evening cookout with neighbors or a gathering of friends for a sporting event, grilling can bring people together in a fun and casual way.
Thanks to websites like Craigslist, eBay, and Facebook Marketplace, second-hand grills in good condition are often available locally and at a much lower cost than brand-new grills.
9. Storage Items
Stepping into your first apartment, huh? The organization will be your closest ally.
Crisp and neat storage items can help you stay clutter-free and make your space feel like home.
This is something I would wait to buy until you are in your space and know what you need. There are so many storage ideas and organization items.
10. Decor
Making your first apartment feel like home is both exciting and challenging. Decor plays a crucial role, transforming an empty space into a cozy, personal refuge.
You want the decor to reflect your style, but the cost may be more than you can afford.
Enter thrift shopping for some of your favorite items.
You can always splurge on that one item you want!
How do I prepare for my first apartment?
Getting your first apartment can be incredibly thrilling, but let us guide you through a smooth transition.
Before making any purchases, it’s critical to create a budget that takes into account moving costs and other associated expenses.
Additionally, make a checklist of essential items to ensure a smooth move, but remember to prioritize immediate needs as some items may not be necessary initially.
Being prepared and methodical about your approach can help significantly in making your first apartment feel like home. It’s all about spending wisely and sticking to your plan.
First Apartment Checklist for Bedroom
Ready to move into your first apartment and need help setting up your bedroom?
This checklist will ensure you won’t miss any essentials.
Bed: Choose a full or queen-size bed to maximize space.
Mattress: Select the right firmness for your sleep style. Don’t forget a mattress pad and bedding.
Nightstand: You need this to place essentials like a reading lamp and a glass of water.
Dresser: An essential piece of furniture for your clothing storage.
Lamp: A softer lighting option for your bedroom. Don’t forget light bulbs!
Closet Organizers: Invest in baskets or cloth storage cubes for easy organization.
Desk and Chair: A small workspace if your room allows. Opt for a stool or folding chair to save money.
Remember every space is unique, tailor this list to your needs and budget.
First Apartment Checklist for Kitchen
As you embark on your solo living adventure, setting up your kitchen shouldn’t be a brain tease.
Here’s a lifesaver list of must-haves:
Remember, your kitchen is not just for cooking, but for hosting toasts and storing eats. Cheers to your new apartment kitchen!
First Apartment Checklist for Living Room
When setting up your first apartment living room, remember to shop for these essential items:
A Cool Lamp or Two: Lighting is crucial. Pick unique lamps that add both light and character to your space.
Side Tables: Grab a couple; these provide additional surfaces for decorations or mugs of tea.
Storage Solutions: Think TV cabinets or bookshelves where you can neatly store your belongings.
Extra Seating: More seats for more guests.
Window Treatments: Curtains or blinds not only offer privacy but can also tie a room together.
Decorative Pillows and Throw Blankets: For aesthetics and comfort.
Decor Items: This includes wall art, picture frames, coffee table books, houseplants, candles and vases. Make your space you.
Be smart in your selections, ensuring each item marries functionality with aesthetics. Holistic harmony is key in a living space.
Technology for Your First Apartment
In today’s digital era, modern apartments are nearly incomplete without a range of essential tech items.
These add convenience, entertainment, and a sense of security to your cozy abode.
Smart TV: This is essential for entertainment and relaxation. It can be a source of news, sports, movies, and shows that make your apartment a much more enjoyable living space.
Roku Stick: If you opt for a basic TV, then these devices enable you to stream content like Netflix, YouTube, and Hulu directly to your TV. This is much needed if you prefer digital streaming over traditional network channels.
Computer / Laptop: This is useful for work, learning, entertainment, and communications in the current digital era. It helps you stay connected to the world and perform various tasks easily.
Wifi Router: A Wi-Fi router is a must-have in this age as it provides an internet connection for all your devices. It enables you to stay connected to the world, shop from home, stream entertainment, or work remotely.
Chargers: Chargers for phones, laptops, and other electronics are essential. They keep your devices powered up and ready for use at any moment.
Speakers: They enhance your entertainment experience by providing high-quality sound for music, TV shows, and movies. They can also be useful for work or study, for instance when participating in video conferences or online courses.
Thankfully prices have dropped significantly on TVs since I bought my first one!
First Apartment Checklist for Bathroom
One key area to consider is your bathroom – it’s essential to have all the basis to make your daily routines smooth and simple. Here’s what you’ll need:
Cleaning Your First Apartment
Ready to take that first crucial clean sweep in your very first apartment? Here’s how you’ll nail it!
Start with unpacking your cleaning essentials, preferably even before you start arranging your furniture. This will make it easier to spot dust, stains, and dirty spots that are usually hidden.
Now, let’s dig into your basic apartment clean-up kit:
Honestly, these frugal green items are perfect to keep things clean and on budget.
Things you need for an apartment that you wouldn’t think of
Moving into your first apartment is an exciting milestone, but it’s also full of small details that are easy to overlook.
Some essential items might not make it on your moving checklist, leaving you scrambling on your first day in your new place.
Basic Handyman Tools: A Leatherman or small toolkit is essential for assembling furniture and making minor repairs.
Hangers: You’ll need more of these than you think for your wardrobe.
Extension cords and surge strips: You’ll need these to plug in all your electronics in spaces with limited outlets.
Drawer organizers: Helps keep your belongings categorized and easy to find. Especially important in small spaces where efficient storage is key.
Flashlight: You never know when a power outage may happen. A flashlight is a crucial tool for safety and navigation in the dark.
Batteries: Handy for various gadgets like remote controls, flashlights, and smoke detectors.
First aid kit: Accidents can happen anywhere, and having a first aid kit handy can make dealing with minor injuries easier and more efficient.
Light bulbs: Essential for maintaining good lighting in your apartment. You don’t want to be left in the dark when a bulb burns out.
Matches and/or lighters: Useful not only for candles and gas stoves but also a necessity in case of a power outage.
Pen and paper: Although we live in a digital age, pen, and paper are still handy for jotting down quick notes, lists, or reminders.
Fire Extinguisher: Better to be safe than sorry!
Carbon Monoxide Detector: Extremely important to have in your apartment
Duct Tape: It solves every DIY project – while almost any.
Security Cameras: It bums me out completely to add this to the list, but in today’s society it is a must-have.
Renter’s insurance is instrumental for various reasons
It provides financial protection in case of unforeseen circumstances like theft, damage due to disasters like fires, or liability if someone gets hurt in your apartment.
Additionally, considering the value of electronics, furniture, clothing, and other personal belongings, investing in renter’s insurance helps safeguard one’s possessions, making it invaluable, especially for first-time renters.
How do I budget for my first apartment?
Managing your expenses while moving into your first apartment is crucial since it’s usually an expensive endeavor with many large and small essentials needed to fully complete your home.
Having a budget not only helps you to control your finances effectively but also assists in prioritizing immediate needs, avoiding unnecessary items, and managing moving costs and related expenses.
Step 1: Make a Budget
Budgeting is, unquestionably, a crucial strategy to manage your personal finances efficiently, particularly while setting up a new apartment.
Begin by detailing your annual net income.
Subsequently, list down all your essential expenditures, such as food, household supplies, phone bills, car payments, credit card bills, clothing, transportation costs, internet charges, healthcare expenses, school loans, and entertainment.
Don’t forget to add a section for “miscellaneous” to cover any unanticipated expenses.
Make sure your expenses are less than your income.
While rent will be your biggest expense, you want to make sure you can truly afford the amount without going broke.
If you observe that your expenses are relatively high, it’s time to analyze your spending patterns and cut down on unnecessary spending.
Step 2: Save Money
Saving money and living frugally requires strategic thinking and discipline.
Honestly, the simplest thing you can do is to set aside 20% of your income each paycheck. That will ensure you are on your way to becoming financially independent.
Simply remember, frugal living doesn’t equate to deprivation, it’s about making informed choices to optimize your resources.
The 100 envelope challenge is extremely popular!
Step 3: Start a Side Hustle
Side hustles can be a flexible and rewarding way to supplement your income, and they’ve become much more popular in recent years.
Manage your time wisely and ensure the side hustle is something you enjoy or are passionate about. It should be a source of additional income without causing stress or burnout.
Here are ways to make money online for beginners.
First Apartment Tips
Embarking on the journey of renting your first apartment can be both exciting and daunting, hence having some essential tips can be quite handy.
1. Make a list of apartment essentials
A list of apartment essentials plays a crucial role, particularly for first-time movers.
The benefits and significance cannot be overstated. Here’s why:
Prevents Overspending: Moving into a new apartment is already expensive. There are lease deposits, rent due, utility set-ups, and other hidden expenditures that can easily catch first-time movers off guard. Having a list of apartment essentials can keep your spending in check, ensuring that you only purchase what’s necessary and avoid unnecessary or impulsive purchases.
Minimizes Stress: The task of moving can be overwhelming, and missing essential items only adds to the stress. A well-thought-out list can not only help you keep track of what you’ve already acquired but also what you need to purchase or source.
Ensures You’re Prepared and Organized: By carefully creating an apartment checklist, you’re ensuring that you have everything you need in your new home, from cleaning supplies and toilet paper to the necessary items for your furry friends.
Saves Time: A concise and focused list saves you time by clearly stating what needs to be acquired, allowing you to focus on other important matters related to the move.
Follow this approach, and you’ll have a comfy, well-equipped apartment in no time.
2. Consider your budget
Experts advise rent shouldn’t exceed 25-30% of your income. But, don’t forget to include your other costs like food, bills, loans, etc
Remember, your dream apartment isn’t worth it if it’s a financial nightmare. Think smart, save hard, and enjoy your new home’s comforts without breaking the bank.
Learn the ideal household percentages.
3. Research apartments
Researching apartments requires careful consideration of numerous factors such as the proximity to vital facilities like workplaces, grocery stores, hospitals, and entertainment joints.
Try to physically tour potential residences where possible to examine amenities and gauge the atmosphere of the neighborhood.
Don’t forget to make inquiries and view the apartment personally or through a floor plan, all these will help you make a wise decision.
4. Check apartment listings for features and amenities
When searching for the perfect apartment, consider features and amenities that align with your lifestyle.
If there is a sym space, you could eliminate your monthly gym membership.
Just make sure the cost of the upgraded amenities is worth the price tag.
While checking apartment listings, ensure to evaluate the location, amenities, available space, and physical integrity.
5. Think about the size and layout of the apartment
Understanding the size and layout of your new apartment is crucial before you start styling and furnishing it.
Acquire a floor plan from the apartment management, and if possible, tour the apartment physically to note the positioning of rooms, doorways, hallways, and stairwells. Take measurements of these areas and visualize the kind of furniture and fixtures they can accommodate fittingly, taking into account maneuverability around corners as well.
Moving to your first apartment is exciting, yet demands careful consideration of the size and layout.
6. Look for apartments with good security
When you’re hunting for your next apartment, don’t forget to check out its security features. This is crucial for your peace of mind.
Ensure the apartment is in a safe neighborhood, close to amenities like hospitals or public transport.
Ask if the apartment complex has features like controlled access gates, security guards, and CCTV surveillance.
Check the apartment for proper alarm systems, well-functioning locks on doors and windows, and that fire safety measures are in place.
Verify the cell phone reception inside the apartment for any emergency calls.
Lastly, always ensure that the parking area is secure and well-lit.
Remember, your apartment isn’t just a place, it’s your sanctuary. It should feel like one, too.
7. Make sure you get a good deal
Before signing a lease, it’s crucial to ensure the rent price is a good deal.
According to the U.S. Census Bureau, the median gross rent from 2015-2019 was approximately $1,097 per month.
8. Talk to the management and make sure you understand the rules
Get to grips with your apartment’s rules by thoroughly reading your lease. Take note of any restrictions, and don’t fear to ask for clarifications. Data indicates that understanding lease terms significantly reduces tenant-landlord conflicts.
It is important you understand your lease as it is a binding contract.
First Apartment Checklist PDF
Moving into your first apartment is exciting but daunting. The First Apartment Checklist PDF helps simplify the process.
Take it at your own pace—don’t rush. This is your journey to your new home. Enjoy!
FAQ
Moving into a new apartment can be quite exciting yet daunting. It’s crucial to carefully inspect the space to ensure it meets your needs and is in optimal condition.
Check the overall cleanliness. Despite initial cleaning, apartments often accumulate dust while vacant. Ensure you have cleaning supplies handy to tackle any overlooked dirt or grime.
Inspect the utilities. Ensure the availability of necessary technology setups and provisions for all your electronic gadgets. And make sure no wires are hanging from the ceiling.
Verify the safety features. Always have a working lock on the door as well as a well lit entrance.
Examine appliances. Make sure essential household appliances like washers, dryers, and a dishwasher are provided and in working condition.
The comfort and safety of your new apartment rely hugely on these checks.
When determining how much you should spend on rent, it’s generally suggested that your allotment should be no more than 25-30% of your after-tax income.
For instance, if your yearly income after taxes is $40,000 per year, your rent should be about $833-$1,000 per month.
Keep in mind, this amount should cover:
Your rent
Utilities (unless they’re included in your rent)
Rental insurance
It’s essential to create a realistic budget by considering your other necessary expenses like food, transport, healthcare, and entertainment. If needed, find ways to cut some of these costs to afford your dream apartment.
Now Get Moving with your Apartment Shopping List!
In conclusion, creating and managing a first apartment checklist requires a judicious mix of prudence and patience.
It’s an exciting journey of setting up your first independent space but it’s also a test of properly managing your resources without compromising on your basic needs.
It’s crucial to remember that you do not need to get everything at once, and it’s okay to take your time to gradually fill your apartment.
Remember, be mindful of your budget and prioritize based on your specific needs and preferences.
And don’t forget, you’re not just setting up an apartment, you’re creating your own unique sanctuary.
With patience and careful planning, you’ll soon have an apartment that’s not only functionally equipped but also a reflection of your personal style. The experience, in the end, will prove to be as rewarding as it is educational.
Know someone else that needs this, too? Then, please share!!
Graduate school can be expensive. On top of tuition, you typically need to cover the cost of books and living expenses. At the same time, you may be juggling undergrad student debt.
One way to ease costs is to get a graduate assistantship. If you’re not familiar with the concept, a graduate assistantship is a salaried employment opportunity for graduate students. Graduate assistants work a set number of hours per week and, in return, receive a tuition waiver and/or a monthly living stipend.
Securing a graduate assistantship can buoy finances and boost connections. Read on to learn how graduate assistantships work and how to find one.
What Is a Graduate Assistant?
Graduate assistants are students enrolled in graduate or professional schools who assist departments or professors in a teaching, research, or administrative capacity. A graduate assistant might be paired with a professor who is actively engaged in research or work that might complement their career goals or current focus.
Graduate assistantships often benefit both the university and the student. The university is able to fill positions that might be more costly if filled by a traditional employee. The student typically receives a tuition waiver, monthly stipend, and/or a fixed sum of money to help them pay for graduate school. Some programs may also offer class credit for these jobs. 💡 Quick Tip: Fund your education with a low-rate, no-fee SoFi private student loan that covers all school-certified costs.
Things to Consider
Overall, graduate assistant programs are meant to offer value to potential students, and to defray at least a portion of the costs associated with pursuing a graduate degree.
When combined with scholarships, grants, and other financial awards, becoming a graduate assistant can make the costs of grad school more manageable. Some schools also offer tuition waivers — for some or all of the tuition — for qualifying graduate assistants.
Compensation packages vary depending on the school but tuition waivers are more commonly offered to graduate assistants who are employed by the school already, have financial or other hardships, or are veterans (or the spouse or dependent of a veteran).
Graduate assistantships that offer tuition waivers are often competitive, so it can be a good idea to explore the assistantship options offered by your college or department and apply as early as possible.
Another thing to keep in mind: A stipend typically counts as taxable income, though it isn’t considered wages (which means you won’t pay Medicare or Social Security taxes on it). So while assistantships do bring in some extra money, Uncle Sam will collect a portion of it.
As for tuition waivers, graduate assistants can exclude up to $5,250 worth of educational assistance benefits from their income each year, according to the IRS.
Also keep in mind that many universities prefer it if graduate assistants don’t seek additional, outside employment. It’s a common policy intended to protect a graduate student’s limited bandwidth — being a full-time student with an assistantship can feel like having two full-time jobs. Adding an additional part-time job on top of that could become too much of a strain.
Recommended: Finding & Applying to Scholarships for Grad School
Tips on How to Become a Graduate Assistant
How you go about becoming a graduate assistant will depend on the program and school. Acceptance letters often include at least some initial information pointing students toward any financial aid or assistantship the program might be offering.
You can also explore graduate assistantship opportunities by looking at the school’s or department’s website, as well as websites of professors. In addition, you can check the school’s job boards and social media sites, and even just do an online search using the name of your intended school and the phrase “graduate assistant.”
What if You Need More Funding?
Stipends and/or tuition waivers that come with graduate assistantships can make graduate school more affordable. However, if you still have gaps in funding, you may want to explore scholarships, grants, and federal or private student loans.
Graduate and professional students can apply for federal Direct PLUS Loans. Eligibility is not based on financial need, but a credit check is required.
Graduate and professional students may also apply for Direct Unsubsidized Loans; again, eligibility is not based on financial need.
To apply for federal loans for graduate school, you simply need to complete the Free Application for Federal Student Aid, or FAFSA.
Because graduate students face some of the highest federal student loan interest rates, and loan origination fees, you may also want to look into private graduate school loans and compare offers. Just keep in mind that private student loans don’t come with same protections, such as forbearance and forgiveness programs, offered by federal student loans. 💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.
The Takeaway
Getting a graduate assistantship position can help cover the often high-cost of graduate school. These positions can involve being a teaching, administrative, or research assistant. Compensation may be in the form of a monthly stipend and/or a tuition waiver.
If you aren’t able to get a graduate assistantship, or you have secured one but it isn’t enough to fully cover your costs, you may want to look into other sources of graduate school funding, including private grants and scholarships and federal or private student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
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-criteria 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.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Pharmacy school student loans are one way for potential pharmacists to subsidize some or all of the costs associated with attending pharmacy school.
There are several pros and cons to taking out a pharmacy school loan, from the opportunity to receive student loan forgiveness to potential fees for late payments or a drop in credit score.
Keep reading to learn how much it costs to attend pharmacy school, a few different ways to pay for it, what a pharmacy school loan covers, and the ins and outs of pharmacy school student loans.
Average Cost of Pharmacy School
The average cost of attending pharmacy school spans anywhere from $65,000 to $200,000.
It’s a wide range but, generally speaking, in-state, public schools are on the lower end of the scale, costing around $14,800 to $82,000 per year, while pharmacy programs at private institutions can run between $74,800 and $160,000.
Average Student Loan Debt Pharmacy School
The American Association of Colleges of Pharmacy (AACP)’s 2021 survey of pharmacy school graduates found that about 85% of PharmD degree holders had to borrow money to get through school.
And the average student loan debt for pharmacy graduates, according to that same report, is $173,561.
There’s good news, though: The return on investment can be promising for pharmacists, whose median pay is around $128,710 per year, according to the Bureau of Labor Statistics.
What Can You Use a Pharmacy School Student Loan on?
There are several ways a student loan can be used to cover the cost of a pharmacy school education:
Tuition
As evidenced above, tuition is one of the biggest pharmacy school expenses that can be covered by a pharmacy school student loan. Since it can cost upwards of $200,000 to complete a pharmacy program, student loans can be helpful in covering that cost.
Fees
The term “fees” can sound a little bit elusive, and you typically see it thrown alongside the word “tuition.” The fees associated with attending pharmacy college vary based on the type of program the student attends, how many credit hours the student completes, and whether or not they’re an in-state or out-of-state student. In some cases, a pharmacy school may charge “comprehensive fees” that cover tuition, fees and room and board.
Books and Supplies
Pharmacy school student loans can be used to pay for books, supplies and other education-related expenses. To acquire the funds for books and supplies, pharmacy school student loans are first applied to a student’s tuition, required fees, and room and board bills. Then, any remaining funds get refunded to the borrower, either in the form of a check or through direct deposit. From there, the money can be used to pay for books and supplies.
Recommended: How to Pay for College Textbooks
Living Costs
Room and board is another expense that can be paid for with pharmacy school loans. Students can use their borrowed funds to pay for student housing — whether that’s in a dorm room or an off-campus apartment with roommates.
Pharmacy School Student Loans: Pros & Cons
Pros of Using Pharmacy School Student Loans
Cons of Using Pharmacy School Student Loans
Help people pay for pharmacy school when they don’t otherwise have the financial resources to do so.
Can be expensive to repay.
Open up more possibilities for the type of pharmacy school a person can attend, regardless of the cost.
Can put borrowers into substantial amounts of debt.
Cover a wide range of expenses — from tuition and fees to school supplies, room and board.
Borrowers might have to forego other financial goals to pay off pharmacy school student loans.
Paying off pharmacy school student loans can help build credit.
Late payments or defaulting on a pharmacy school student loan can damage credit.
Pros of Using a Pharmacy School Student Loan
Using a pharmacy school loan comes with a few pros:
Student Loans for Pharmacy School Can Be Forgiven
In terms of pharmacists student loan forgiveness, there are several options for newly graduated pharmacists who need some help paying off their pharmacy school loans.
Typically, these forgiveness programs are available on a state or federal level.
A few different pharmacy student loan forgiveness options include:
• Public Service Loan Forgiveness (PSLF)
• HRSA’s Faculty Loan Repayment Program
• National Institutes of Health Loan Repayment Programs
• Substance Use Disorder Workforce Loan Repayment Program
• State-based student loan forgiveness programs
Salary
As mentioned above, the median pay for a pharmacist is around $128,710 per year. For a pharmacy school graduate with student loan debt, this salary range could mean the difference between paying off loans and still having money left in the budget for living expenses, an emergency fund, and other types of savings.
Credit Score
Paying off pharmacy school student loans can be one way for a borrower to boost their credit score. When building credit history, making on-time payments is a prominent factor, which can potentially have a beneficial effect on a borrower’s credit score. Although their credit score could face a minor dip right after paying off the loan, it should subsequently level out and eventually rise.
Pharmacy school student loans appear as “installment loans” on a person’s credit report, which can diversify the types of credit they manage, thus potentially improving their “credit mix.” Which could also help enhance their credit score.
Cons of Using a Pharmacy School Student Loan
Pharmacy school student loans can also come with a few cons:
Debt
Since a pharmacy school loan is an installment loan, it’s considered a form of debt. As such, potential pharmacists are signing a long-term contract to repay a lender for the money they borrow. Should they find themselves on uneven financial ground, they may end up missing a payment or defaulting on the loan altogether, which could have a damaging effect on their credit report.
Late Payment Penalties
Many pharmacy school student loan lenders dole out fees for late payments. The terms of the loan are outlined by the lender before the borrower signs the agreement, but it’s important to read the fine print because loan servicers can charge a late payment penalty of up to 6% of the missed payment amount.
Interest Rates
Student loans for graduate and doctoral degrees like pharmacy school have some of the highest interest rates of any type of student loan.
Even federally subsidized Grad PLUS Loans have a fixed interest rate of 7.05% for the 2023-2024 school year, which could cause a pharmacy school student loan balance to climb high over time.
Recommended: Grad PLUS Loans, Explained
Average Interest Rates for Pharmacy School Student Loans
Pharmacy students have a variety of student loan options available to them. This table details the interest rate on different types of federal student loans that might be used to pay for a portion of pharmacy school.
Loan Type
Interest Rate for the 2023-2024 School Year
Direct Loans for Undergraduate Students
5.50%
Direct Loans for Graduate and Professional Students
7.05%
Direct PLUS Loans for Graduate Students
8.05%
Private student loans are another option that may help pharmacy students pay for their college education. The interest rates on private student loans are determined by the lender based on factors specific to the individual borrower, such as their credit and income history.
Paying for Pharmacy School
Before looking into an undergraduate student loan option or a graduate student loan option, potential pharmacists might be able to secure other sources of funding to help them pay for pharmacy school.
Scholarships
Scholarships are funds used to pay for undergraduate or graduate school that do not need to be repaid to the provider.
They can be awarded based on many different types of criteria, from grade point average (GPA) to athletic performance to acts of service, chosen field of study, and more. Scholarships might be offered by a college or university, organization, or institution.
For potential pharmacy school students, there are several available options for scholarships through their individual states and other providers. The American Association of Colleges of Pharmacy (AACP) is a great resource for finding a pharmacy school scholarship.
Grants
Unlike scholarships or loans, grants are sources of financial aid from colleges, universities, state/federal government, and other private or nonprofit organizations that do not generally need to be repaid.
The AACP breaks down grants and awards for health profession students and government subsidized grants for pharmacy school students on their website.
Recommended: The Differences Between Grants, Scholarships, and Loans
State Pharmacy School Loans
Some potential pharmacists may be eligible to participate in a state student loan program. The cost of attending a state pharmacy school will vary depending on whether or not the student lives in the same state as the school, so researching the accredited pharmacy programs by state can help them determine how much they’ll need to borrow.
Federal Pharmacy School Loans
The U.S. Department of Education offers Direct Subsidized and Unsubsidized Loans to undergraduate and graduate pharmacy school students. The school will determine the loan type(s) and amount a pharmacy school student can receive each academic year, based on information provided by the student on the Free Application for Federal Student Aid (FAFSA®) form.
PLUS Loans are another federal pharmacy school loan option, eligible to graduate or professional students through schools that participate in the federal Direct Loan Program.
Recommended: Types of Federal Student Loans
Private Pharmacy School Loans
A private student loan is another way for students to pay for pharmacy school. When comparing private student loans vs. federal student loans, it’s important to note that because private loans are not associated with the federal government, interest rates, repayment terms. Benefits also vary depending on the lender. For these reasons, private student loans are considered an option only after all other financing sources have been exhausted.
When applying for a private pharmacy school loan, a lender will usually review the borrower’s credit score and financial history, among other factors.
Private pharmacy school student loans can help bridge the gap between other payment options like the ones listed above, and give potential pharmacists the opportunity to shop around for the option that works best for them.
Income-Driven Repayment Plans
Income-driven repayment plans in particular help borrowers qualify for lower monthly payments on their pharmacy school loans if their total debt at graduation exceeds their annual income.
Here are the four income-driven repayment plans available for federal student loans:
• Income-Based Repayment (IBR
• Pay As You Earn (PAYE)
• Revised Pay As You Earn (REPAYE)
• Income-Contingent Repayment (ICR)
The Takeaway
Nearly 85% of pharmacy school graduates have student loans, according to the AACP. Pharmacy school loans can be used to pay for tuition and fees, living expenses, and supplies like books or required lab equipment. Federal student loans can be used in combination with any scholarships and grants the student may qualify for. If you find yourself still looking for a way to pay for your pharmacy school education after exhausting scholarships, grants, and federal student loans, a private student loan option might be an option to consider.
With SoFi’s private student loans, you get a six-month grace period post-graduation before you start thinking about repayment. Interested applicants can find out their rate in just a few minutes.
Learn more about borrowing a SoFi private student loan.
FAQ
How long does it take to pay off pharmacy school loans?
Depending on the type of pharmacy school loan you take out (private vs. federal) and when the funds were distributed, it can take between five and 30 years to repay a pharmacy school student loan.
How can I pay for pharmacy school?
There are several ways to pay for pharmacy school, including federal student loans, private pharmacy school loans, scholarships, grants, and personal savings.
What is the average student loan debt for pharmacy school?
According to the American Association of Colleges of Pharmacy, the average student loan debt for pharmacy graduates is $173,561.
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In the wake of the Supreme Court’s decision to block the White House program for federal student loan forgiveness, President Joe Biden announced the SAVE Plan, a new income-driven plan for federal loan repayment. It is part of his effort to make student loan debt more manageable especially for low-income borrowers, and it replaces the REPAYE program.
Here’s what borrowers need to know about the Saving on a Valuable Education (SAVE) Plan, who qualifies, and the most important deadlines.
Overview of the SAVE Plan
On June 30, President Biden said he had created a new repayment plan, “so no one with an undergraduate loan has to pay more than 5 percent of their discretionary income.”
The SAVE Plan is the most affordable repayment plan for federal student loans yet, according to the Department of Education. Borrowers who are single and make less than $32,800 a year won’t have to make any payments at all. (If you are a family of four and make less than $67,500 annually, you also won’t have to make payments.)
For federal borrowers who are required to make payments (this depends on your income and family size) and have only undergraduate school loans, the monthly payments will be cut in half — from 10% of discretionary income to 5%. How long people will have to make payments depends on their loan balance.
• If their original undergraduate loan balance is $12,000 or less, they will need to make payments for 10 years – and after that, any remaining balance will be forgiven.
• If their original undergraduate loan balance is more than $12,000, their payment period is capped at 20 years (the term goes up one year for every $1,000 above $12,000) — and any remaining balance will be forgiven.
For federal borrowers who have both undergraduate and graduate loans, their monthly payments will be a weighted average of 5% and 10% of their discretionary income. How long they will need to make payments is pending government guidance.
And for federal borrowers who have only graduate school loans, their monthly payments will be 10% of their discretionary income. After 25 years of payments, any remaining balance will be forgiven.
Recommended: Discretionary Income and Student Loans, and Why It Matters
How SAVE Is Better Than REPAYE
The SAVE Plan is replacing the Revised Pay As You Earn Repayment Plan (REPAYE). It is an improvement on it in several ways:
• The SAVE Plan allows for low-income borrowers to make no payments at all.
• The SAVE Plan requires low-balance borrowers ($12,000 or less) to make payments for only 10 years.
• The SAVE Plan requires borrowers with only undergraduate debt to pay 5% (instead of 10%) of their discretionary income.
Additionally, if the required payment based on your income does not cover all of the interest that accrues every month, the uncovered amount will not be added to your balance. In other words, your balance will not grow if you are making your payments.
Who Will Owe $0 in Monthly Federal Loan Payments Under SAVE?
Whether you will owe monthly federal loan payments under the SAVE Plan depends on two factors: your income* and your family size. Your payment will be zero if your income is at or under 225% of the Federal Poverty Level (FPL)**.
To find out if you will be one of the estimated million borrowers who still won’t have monthly payments to make after the federal payment pause ends, look up your family size in the table below. If your income* is equal to or below the corresponding “2023 Income Level Protected From Payment Under SAVE,”** your monthly federal student loan payment will be $0.
*Normally, the government uses adjusted gross income figures, but the DOE did not specify this in its factsheet .
**Usually the government uses the prior year’s FPL and your prior year’s income, but the DOE used 2023 figures in its factsheet.
2023 Income Levels Protected From Payment Under SAVE by Family Size
Family Size
2023 Incomes at Federal Poverty Level (FPL)
2023 Income Level Protected From Payment Under SAVE (FPL x 225%)
For individuals
$14,580
$32,805
For a family of 2
$19,720
$44,370
For a family of 3
$24,860
$55,935
For a family of 4
$30,000
$67,500
For a family of 5
$35,140
$79,065
For a family of 6
$40,280
$90,630
For a family of 7
$45,420
$192,195
For a family of 8
$50,560
$113,760
For a family of 9+
Add $5,140 for each extra person
$125,325+
How Much Your Monthly Federal Loan Payments Could Be Under SAVE
To calculate how much your monthly federal payments could be starting in October 2023 under SAVE, look up your family size in the table above and see the corresponding protected income level**. Subtract that dollar amount from your estimated 2023 income* and multiply it by 10%. Then take that figure and divide it by 12 to get your monthly payment amount.
(2023 Income* – 2023 Protected Income Level**) x 10% ÷ 12 = Monthly Federal Loan Payment Under SAVE
*Normally, the government uses adjusted gross income figures, but the DOE did not specify this in its factsheet.
**Usually the government uses the prior year’s FPL and your prior year’s income, but the DOE used 2023 figures in its factsheet.
When Will the SAVE Plan Take Effect?
While the SAVE Plan will replace REPAYE by the time payments are due in October, SAVE will not fully take effect until July 1, 2024.
This means that borrowers who are eligible to have their payments cut to 5% of their discretionary income won’t see the reduction until summer next year.
But the DOE is increasing the amount of income that is protected from payments, so that single borrowers who make up to $32,800 will not have to make payments and borrowers in a family of four making less than $67,500 also won’t have payments due.
Also, starting in October, federal borrowers whose required payments don’t cover all of the interest that accrues every month will not owe the uncovered interest amount.
Who Is Eligible for the SAVE Plan?
The SAVE Plan is available to federal student borrowers with Direct student loans. This includes:
• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans made to graduate or professional students
• Direct Consolidation Loans that did not repay any PLUS loans made to parents
Additionally, you are eligible for the SAVE Plan if you consolidated a loan from the Federal Family Education Loan (FFEL) Program, including Subsidized and Unsubsidized Federal Stafford Loans, FFEL Plus Loans for graduate or professional study, FFEL Consolidated Loans that did not repay parents’ PLUS loans, and Federal Perkins Loans.
The SAVE Plan is not available for private student loans or parent PLUS loans. Also, borrowers must be in good standing with their student loan payments. Borrowers in default who provide income information that shows they would have had a $0 payment at the time of default will be automatically moved to good standing, allowing them to access the SAVE plan
How to Enroll in the SAVE Plan
Borrowers who are already enrolled in the REPAYE program will be automatically enrolled in the SAVE Plan. During the transition, the DOE says it will use the two plan names, SAVE and REPAYE, interchangeably.
Those who are not currently in the REPAYE program can apply now (this summer), and they will be switched to SAVE automatically.
In addition to the SAVE program, President Biden announced that the DOE is instituting a 12-month “on-ramp” to repayment, running from October 1, 2023 to September 30, 2024, so that financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.
Moreover, the Public Service Loan Forgiveness Program exists to help professionals working in public service who are struggling to repay federal student loans.
The Takeaway
Though the new SAVE Plan for federal student loan borrowers won’t take full effect until July 2024, some benefits will be implemented by October this year, when payments will be due again. Namely, low-income borrowers may be exempt from making payments, while loan balances will not grow for borrowers making payments even if their required payment amount doesn’t cover all of the interest that accrues every month.
Next summer, in July 2024, eligible federal borrowers with only undergraduate debt will see their monthly payments cut at least in half.
This article will be updated as the DOE releases more information about SAVE. To find more details yourself, this StudentAid page is a good place to start.
Photo credit: iStock/Pekic
SoFi Student Loan Refinance NOTICE: The debt ceiling legislation passed on June 2, 2023, codifies into law that federal student loan borrowers will be reentering repayment. The US Department of Education or your student loan servicer, or lender if you have FFEL loans, will notify you directly when your payments will resume For more information, please go to https://docs.house.gov/billsthisweek/20230529/BILLS-118hrPIH-fiscalresponsibility.pdf https://studentaid.gov/announcements-events/covid-19
If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income based repayment plans or extended repayment plans.
According to the Association of American Medical Colleges (AAMC), the average medical school debt for students who graduated in 2022 was $205,037.
While many med school students eventually may earn six figures or more, they also can expect to graduate with student debt that averages close to a quarter of a million dollars.
And that’s just what these graduates owe for their medical school education. Researchers at EducationData.org found that 43% of indebted medical school graduates also have premedical education debt to pay for.
Because of the high cost of the average debt of a medical student, it’s crucial for aspiring and current medical school students, and graduates, to understand their debt repayment options.
Medical School Debt Statistics
Here’s a snapshot of what the average med school debt can look like for graduates, based on a roundup of the most recent statistics available:
• According to a 2022 report by EducationData.org, medical school graduates had, on average, $250,990 in total education debt (premed and medical school). Compare that with the average educational debt for the class of 1999-2000: $87,020.
• When the AAMC looked at members of the class of 2020 who took out educational loans, it found that:
◦ 5.4% borrowed $1 to $49,999 for premed studies and medical school
◦ 6.1% borrowed $50,000 to $99,999
◦ 8.2% borrowed $100,000 to $149,999
◦ 13.7% borrowed $150,000 to $199,999
◦ 25.1% borrowed $200,000 to $299,999
◦ 11.2% borrowed $300,000 to $399,999
◦ 2.9% borrowed $400,000 to $499,999
• While the cost of medical school grew 2.5%, the annual growth rate of medical school debt is 12.4%, as calculated by EducationData.
Source: Association of American Medical Colleges
What Does This Mean for Borrowers?
It’s important to note that, when it comes to borrowing for medical school, loan interest rates offered by the federal government, along with the terms and conditions, might be different from borrowing as an undergrad. This is one of the basics of student loans that it’s helpful to understand when it comes to the average medical school debt.
Some med students may benefit from scholarships and loan forgiveness programs that could cut their costs substantially. But many will end up making loan payments for years—or even decades.
So what does the average medical student debt look like? According to the number crunchers at EducationData, the average doctor will ultimately pay from $135,000 to $440,000 for his or her educational loans, with interest factored in.
Source: Association of American Medical Colleges
Medical School Loan Options
Types of federal student loans available to medical students to help with the average med school debt include Direct Unsubsidized Loans, with a limit of $20,500 each year.
Rates for this type of loan are currently lower than for the other type of federal student loan available to those going to medical school, Direct PLUS loans. The current rate for Direct Unsubsidized Loans is 6.54%, while Direct PLUS loans have an interest rate of 7.54% through July 1, 2023.
There isn’t a financial need requirement for either type of federal student loan, so many medical students qualify for both. With Direct Unsubsidized Loans, there is no credit check, but there is a credit check for PLUS loans.
Medical students also can apply for private student loans to help cover their average medical student debt. Generally, borrowers need a solid credit history for private student loans, among other financial factors that will vary by lender. Private lenders offer different rates, terms, and overall loan programs.
Federal loans come with many student protections and benefits that private loans don’t, such as the Public Service Loan Forgiveness program and income-driven repayment.
Medical students also may choose to defer federal student loans during their residency, which isn’t typically an option with private student loans.
Recommended: Private Student Loans Guide
How to Deal With Debt
There are several strategies that graduates grappling with the average medical student debt may want to consider.
Deferment
If you’ve ever borrowed money—for school or otherwise—you know that two critical factors can influence how much the loan will cost overall.
• The interest rate you’re paying
• How long you take to repay the loan or loans.
The repayment timeline is often extended when medical residents make partial monthly loan payments or no payments at all. Putting off payments may seem like a good idea during a stressful time, but delaying can be costly.
Most federal student loans, when deferred, continue to accrue interest. The problem those in medical fields can face is debt accumulation during their residency, which can last anywhere from three to seven years.
Even while making a modest income—in 2022, the average resident earned $64,200, according to Medscape—the debt would grow considerably.
Part or all of your unpaid interest might currently be capitalized when you complete your residency. This means the accrued interest is added to the principal of the loan, and that new value is then used to calculate the amount of interest owed. However, thanks to new regulations set to take effect in July 2023, interest capitalization will be eliminated on most federal student loans, saving borrowers money.
If you decide to put your loans in deferment or forbearance, making interest-only payments and putting that money toward student loans can reduce the amount of interest that could be added to the loan.
Income-Driven Repayment
An income-driven repayment plan is an option for medical residents who can’t afford full payments. The four plans limit payments to a percentage of borrowers’ income, extend the repayment period to 20 or 25 years, and promise forgiveness of any remaining balance.
In general, borrowers qualify for lower loan payments if their total student loan debt exceeds their annual income. Payments are based on discretionary income, family size, and state.
Refinancing Loans
Refinancing medical school loans to help cover the average medical student debt is an option during residency, after residency, or both.
Refinancing student loans with a private lender might help save you money if you can get a lower interest rate than the rates of your current student loans.
Student loan refinancing means paying off one or more of your existing federal and private student loans with one new loan. An advantage of refinancing student loans is that you’ll only have one monthly payment to make.
If you refinance your student loans and get a better rate, you could choose a term that allows you to pay off the loan more quickly if you’re able to shoulder the payments, which should save you in interest.
However, refinancing isn’t a good fit for those who wish to take advantage of federal programs and protections. Refinancing federal loans means you no longer have access to these benefits.
Recommended: Student Loan Refinancing Calculator
Consolidating Loans
The federal government offers Direct Consolidation Loans, through which multiple eligible federal student loans are combined into one. The interest rate on the new loan is the average of the original loans’ interest rates, rounded up to the nearest one-eighth of a percentage point.
If your payment goes down, it’s likely because the term has been extended from the standard 10-year repayment to up to 30 years. Although you may pay less each month, you’ll also be paying more in interest over the life of your loan.
Schools With the Highest Student Debt
When it comes to student debt, all medical programs are not equal. According to U.S. News and World Report’s “Best Grad School” rankings, the range can be extensive. Out of 122 medical schools listed, the three that left grads with the most debt in 2022 were:
• Nova Southeastern University Patel College of Osteopathic Medicine (Patel) in Fort Lauderdale, Florida: $322,067
• Western University of Health Sciences in Pomona, California: $281,104
• West Virginia School of Osteopathic Medicine in Lewisburg, West Virginia: $268,416 On the other end of the spectrum, the school that graduated students with the least amount of debt in 2022 was New York University in New York, New York, with about $85,000.
Public vs. Private Medical School
The cost of attending a private medical school is typically higher than a public school.
According to the AAMC, these were the median costs of tuition, fees, and health insurance for first-year medical students during the 2022-2023 school year.
• Private school, in-state resident: $67,294
• Private school, nonresident: $67,855
• Public school, in-state resident: $41,095
• Public school, nonresident: $65,744
According to EducationData, however, the average public medical school graduate leaves school owing a higher percentage of the cost of attendance (79.9%) than the average private school medical school graduate (65.1%).
The Takeaway
There’s no doubt that studying medicine can lead to a lucrative career, but the route can be daunting, in every way. When the average debt of a medical student tops $250,000, some aspiring and newly minted doctors look for a remedy, stat.
If you’re leaning toward refinancing, SoFi’s student loan refinancing offers a fixed or variable interest rate, no fees, and a simple online application. SoFi also has a program specifically for medical residents. Potential borrowers might benefit from a low rate or low monthly payments during residency.
Get prequalified and check your student loan refinancing rate with SoFi.
SoFi Student Loan Refinance If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.
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.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi Student Loan Refinance If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.
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). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
When my husband and I got married nine years ago, we had an audacious dream of paying cash for our first home. At that time, it was very much a far-off dream — we were just trying to survive the rigors and expenses of law school without going in debt. That alone was a seemingly gigantic feat.
But after three years of law school, my husband did graduate without debt, passed the bar, and we started planning for the future. Since we’d been renting for almost four years, my husband had a good job, and our second baby was on the way, pretty much everyone expected that buying a house would be in our immediate future.
I mean, after all, isn’t buying a house the responsible thing for a young couple to do? Well, maybe — or maybe not. We didn’t have much money in savings, and we weren’t sure how long we would be living in the town we were in, so we chose to go against conventional wisdom and continued renting.
Setting a Goal
Within the next six months, my husband lost his job, we relocated to another city so he could find work, I had some significant health problems in my pregnancy which resulted in numerous hospital and doctor’s bills, and we had our second baby. Needless to say, we were incredibly thankful that we hadn’t taken out a mortgage and then had to deal with the headache of trying to sell a house at the last minute — especially since the housing market was poor in our area.
It was around this time that we were first introduced to Dave Ramsey. While we didn’t have any debt and had always lived on a strict budget, going through his Financial Peace University Class fired us up to set big financial goals and work hard to accomplish them.
One of the big goals we decided to aim for was paying cash for our first home. We crunched a bunch of numbers and realized that, if we continued to live simply and frugally and worked hard to bring in extra money through side jobs, we could save enough over the course of five years to pay cash for a starter home.
It felt like a mammoth goal and we weren’t sure if we could do it, but we decided to go for it anyway. We figured that, even if we didn’t make our goal in five years, we’d at least be a lot closer to it than if we didn’t try at all! Plus, from our calculations, we’d be in a lot better position to wait to buy — even if it took seven years to save up enough for a house — than if we were to go ahead and get 15-year mortgage and pay it off early.
We knew that we could buy a decent starter home in the area where we were planning to move for around $100,000 to $110,000, so we divided $100,000 by 60 (since there are sixty months in five years) and set a goal to save $1700 every month. Because we didn’t have any debt or school loans, and because we lived simply and frugally, we were able to live on significantly less than we were making, thus freeing up a good chunk of money to put towards our house savings each month.
Gazelle-Like Intensity
Once we set this goal and I blogged about it publicly, we were incredibly motivated to work as hard as we could and delay every purchase we could in order to put as much as possible into our house savings fund. We used coupons, ate a lot of meatless meals, shopped at thrift stores, cooked from scratch, brown bagged it, continued to use our old and worn-down furniture, didn’t replace anything that wasn’t an absolute necessity, limited our going out to eat, only had one car, stayed home a lot, used gift cards from Swagbucks to buy any non-necessities, bought eye glasses from Zenni optical, learned to be content with what we had, and continued to live on a strict written budget.
Meanwhile, we also looked for ways to increase our income. I blogged, wrote ebooks, and took on freelance writing jobs. My husband did contract work, started his own law firm, and helped me running the blogging business.
That first year, we didn’t always make our monthly savings goals. We had some unexpected medical bills and car problems that ate up a portion of our savings. But we kept plugging away, throwing whatever extra we could squeeze out of our income toward savings.
The few years of long hours and hard work we’d put into blogging started to really pay big dividends and by the second year, we were meeting and exceeding our monthly savings goals every single month. As our house savings fund increased, we began to get so excited that we kind of went overboard and worked long, long hours in order to meet our savings goal even faster. I wouldn’t recommend putting in such long hours, missing so many social events, or sleeping so little, but the effort paid off because, at the end of two and a half years, we paid 100% down on our first home!
Even though I wish we had given ourselves a little more breathing room and margin while saving, it was thrilling, fulfilling, and exciting to achieve this goal — in half the time we had initially planned. And we are thankful we chose to take a counter-cultural route and pay cash for our house. Not having a mortgage payment has freed us to continue to save aggressively toward other goals, increase our spending in areas that really matter to us, and give generously to needs in our community and around the world.
